Danske Tracker
Registered User
- Messages
- 10
What about?That sounds like salary sacrifice.
It’s more complicated then this, but basically:
1) “Hi Tom, I hear you want your redundancy paid into your pension fund, we can do that” isn’t fine
2) “Tom, we’re making you redundant and we’re paying €X into your pension fund, take it or leave it” is fine
So it depends whether one can arrive at Scenario 2.
Doesn’t work I reckonWhat about?
3) 'Oh, I'm getting a redundancy payment of €x,000 you say? Coincidentally, I want to make an AVC of €x,000 into my pension fund this month. It just so happens...'
Thanks for the response - My thinking was that the growth it would have in a pension fund for a sum I didn't expect would be a good place for it to sit. However I was wondering what the downsides to this would be ( apart from no access until retirement and no tax relief for the sum going in).That sounds like salary sacrifice.
It’s more complicated then this, but basically:
1) “Hi Tom, I hear you want your redundancy paid into your pension fund, we can do that” isn’t fine
2) “Tom, we’re making you redundant and we’re paying €X into your pension fund, take it or leave it” is fine
So it depends whether one can arrive at Scenario 2.
Can you not get it tax-free, or partly so, and do other things like pay down debt?Thanks for the response - My thinking was that the growth it would have in a pension fund for a sum I didn't expect would be a good place for it to sit. However I was wondering what the downsides to this would be ( apart from no access until retirement and no tax relief for the sum going in).
Afaiu yes you can. As you say you will not get tax relief in it. You can claim future tax relief on it though.I am taking redundancy at the end of the year and I am wondering if I can request that payroll pay the full Redundancy payment into my pension as an AVC. I will receive the redundancy about 2 weeks before I actually finish up working.
I am already making the maximum payment of 25% for tax relief into my Pension, but can I put my redundancy into my pension. I realise I will get no TAX relief on it but is it an option for me and worth doing? Thanks
The pension provider is telling you that there’s no limit to the pension contribution that can be made? That’s surprising given that their business is selling pensions…I have spoken to my pension provider and they have said that as I am employed until the 31st Dec ( however paid the redundancy 2 weeks prior to that) then there is no limit to the lump sum I can make to my pension once Payroll are agreeable. Obviously I can make no further payments to my pension after 31st Dec. So as it stands, I can't see any reason why I wouldn't make a lump sum payment as I don't need to reduce debt and want to ensure I have as large a pot as possible set aside from this particular employment to grow until retirement.
I have spoken to my pension provider and they have said that as I am employed until the 31st Dec ( however paid the redundancy 2 weeks prior to that) then there is no limit to the lump sum I can make to my pension once Payroll are agreeable. Obviously I can make no further payments to my pension after 31st Dec. So as it stands, I can't see any reason why I wouldn't make a lump sum payment as I don't need to reduce debt and want to ensure I have as large a pot as possible set aside from this particular employment to grow until retirement.
Forgive me, I'm being a bit slow today.The issue here is ‘salary sacrifice’ as per the posts above.
I think what’s being said is that the redundancy is, say, €X, and the poster is asking the employer to recharacterise it as an employer pension contribution of €X.Forgive me, I'm being a bit slow today.
If the net after tax amount is being paid into AVC, where's the salary sacrifice issue? Or maybe I've completely misunderstood what @Danske Tracker is asking?
Yes, but then that’s salary sacrifice, plus the AVC is limited to 25% of €115k less the 25% of normal income that the OP’s already doing. Plus some or all of the redundancy may be tax-free anyway.I understood it to be receiving redundancy payment and putting it into a pension as a lump sum. Rather than getting the money and transfer to pension, the OP is asking can the employer do it directly.
Maybe, but it sounds to me like an employer pension contribution.I only see a request for payroll to send money directly to pension rather than be paid to op and then op reroutes it. I don't see a request for the company to pay it tax free into pension.
I think this is clear as in the op they say they realize they will not get tax relief on it.
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