Private sector pension query

W

Westcider

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I am currently in PAYE employment with some outside self employed income - say approx 10 to 20% of my PAYE income.

I have a personal pension which has suited my needs up to now, regular contributions from my PAYE employment and lump sums from bonuses and outside employment.

I have moved employers regularly in the past - usually every 3 years or so.

My current employer wishes to contribute to a pension for me - 3% of income.

I am told they cannot contribute to my personal pension (I am currently maxing out my own contributions).

An executive pension isn't really ideal as I will probably move a couple more times before retirement and I wish to make contributions from my other sources of income.

I had thought to open a PRSA for the employer contributions and carry on with my personal pension but my provider says this is not allowed. Is this correct - this provider has been less than accurate in the past, (usually due to poor quality of staff).

What is the most cost effective set up for the above scenario?

TIA
W
 
Does your current employer already have a pension scheme set up?
If so, just go with that. You can transfer it to your preferred pension the next time you move employment.
 
Hi, current employer does not have a scheme - there's only a handful of employees. If there was an employer's scheme, can I make contributions to it from outside income?
 
Westcider said:
I had thought to open a PRSA for the employer contributions and carry on with my personal pension but my provider says this is not allowed. Is this correct - this provider has been less than accurate in the past, (usually due to poor quality of staff).
Click to expand...

This is wrong, assuming that your combined income is not greater than €115,000 per year. You can have a PRSA and a Personal Pension running in parallel. You just need to make sure that your personal contributions to both don't exceed your age-related limits for tax relief (25% in your 40s and so on).

One solution would be to have a PRSA into which your employer contributes and you can contribute. Your employer is obliged to deduct your contributions from salary meaning that you get your tax relief on them immediately without having to apply to Revenue, which is convenient. You can usually get 100% investment on PRSAs these days and 1% annual charge (or less for index-tracking funds).

If your Personal Pension has lower charges than your PRSA, then you can also contribute to the Personal Pension. If it's the other way around then you can route everything into the PRSA.

Regards,

Liam
www.FergA.com
 
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