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Pension Plans

Do you have a pension plan?

With a variety of pensions to choose from; Company Pension, Personal Pension, Retirement Bonds Or PRSA’s. Let us help you pick a plan that suits you today. 

Contact Frank for all you pension needs.

Personal Pension

The first question we ask when talking to you about retirement is: ‘What do you want to do when you retire?’ Most people will say they simply want to be comfortable and financially secure. At Frank Ryan Financial Services we think you should be a little more ambitious. After all, you have worked all your life so why not plan for retirement as something special, something to really enjoy?

A pension is simply a tax-efficient plan for the investments you hold to fund your retirement. To make sure your plan offers you the highest levels of flexibility, transparency and value for money, you need to look at the options offered by various Providers.

Any self-employed or a PAYE employed person can contribute to a personal pension plan. There are several benefits to contributing to a personal pension plan including full tax relief on your contributions, tax-free investment growth and tax free cash on retirement (25% of your fund). You can retire at any time between the ages of 60 and 75, take your tax free lump sum and then invest the remainder of the fund, or cash it in subject to a deduction of taxation.

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frank ryan financial services

Company Pension

An employer pension plan (or occupational pension plan) is one that is set up by an employer to provide pension and other benefits for employees. The main advantage of this type of plan is that your employer must make a contribution to it, even though the amount may be small.

Your employer usually sets up the rules of the pension plan, and appoints people called trustees to look after it.   Your employer automatically takes your contributions from your salary before working out income tax. So, you get tax relief automatically because you don’t pay tax on your pension contribution

The employer must contribute at least one tenth of the total contributions made to the scheme. There are two types of company pension scheme:

  1.  Defined benefit: Where the retirement benefits are based on the final salary at retirement as defined under the rules of the scheme and the number of years worked with the company.
  2.  Defined contribution: Where the benefits are directly related to how much the employer, and perhaps the employee have contributed to the scheme. The total contribution plus the investment growth determine the total value of the retirement fund.

What happens if I become ill and cannot continue to work?

Some employers provide an ill-health pension for their employees if they have to retire early because of ill-health.

If your employer does not provide these benefits, consider taking out some form of salary protection insurance, such as permanent health insurance (PHI). This type of policy is not the same as a pension but it can replace part of your income for as long as you are unable to work due to ill-health.

Personal Retirement Savings Accounts (PRSA):

This is a special type of personal pension policy that is designed to be more flexible than the traditional Personal Pension Plan. Anyone up to age 75 can take out a PRSA.  You don’t have to be earning an income, (although you won’t get tax relief on your contributions unless you have an income).

What happens if I die before I retire?

The value of your Personal Pension or PRSA passes to your estate for the benefit of your dependants if you die before you retire. You need to consider the value of your pension plan when deciding how much life insurance cover you need, or when you make a will.

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frank ryan financial services

Tax Relief

You can see from the following table that for every €100 of your income you invest in a pension plan, the real cost to you (after tax relief) is actually less. It costs you €80 if you pay tax at 20%, or €58 if you pay tax at the top rate of 42%.

If you are an employee, your cost will be even lower than this as you can also get some relief on PRSI and health levy payments. If you have an employer pension plan, you don’t have to pay tax on any contributions your employer makes.  The maximum earnings you can take into account for pension tax relief is currently €254,000 per year.

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