Pensions for Company Directors
If you are the Director of a company an issue which is likely to be to the forefront of your mind is how to turn company profits into personal wealth. Your business’s profits are your future, but you need to convert them to personal wealth tax effectively.
Pensions are a superb tax planning tool for self-employed Company Directors, as outlined by Eoghan Gavigan in a recent column in the Business Post here (bottom of page).
As a business lender for over 15 years and a Company Director, I can show you how to manage your company finances tax efficiently.
As well as advising me on the performance of my existing personal pension & arranging life insurance policies, Eoghan is also now overseeing our business needs. So far, he has implemented an employee pension scheme & is advising on corporate co-director & key-person insurance. I have found him to be exceptionally knowledgeable and honest and wouldn’t hesitate in recommending him to others for either business or personal pensions/investments etc. Google Review by Dawn Richardson – check out this and our other Google reviews.
As a company Director you will have a choice of a PRSA or an Executive Pension Plan, sometimes referred to as an EPP. You may also see these referred to as a Master Trust. We can guide you in your choice of product.
Retirement Planning Tips for Company Directors in Ireland
Effective pension planning for company directors requires more than simply making contributions — the decisions you make from the outset can have a significant impact on the size of the retirement fund you ultimately build. Here are three of the most important tips we offer clients;
- Start Drawing Taxable Remuneration From Day One
One of the most common and costly mistakes a company director can make is deferring the payment of a salary, even a nominal one, when the company first starts trading. Your pensionable earnings are calculated based on your remuneration history with the company, and years without any PAYE income can permanently reduce the maximum pension contribution your company is permitted to make on your behalf. This applies equally to any spouse or family members employed in the business — if they work in the company, they should be drawing some level of income from the outset.
- Don’t Assume the Same Pension Product Is Right for Every Director
Company directors in Ireland typically have a choice between a PRSA (Personal Retirement Savings Account) and an Executive Pension Plan (EPP), sometimes referred to as a Master Trust. The right product depends on your individual circumstances — your salary, years of service, existing pension funds, and retirement plans. Just because a PRSA was recommended to someone you know who is also a Company Director does not mean it is the most suitable option for you. Independent, personalised advice is essential before selecting any pension structure.
- If You Don’t Have an Investment Strategy, You Need One
A well-constructed pension without a coherent investment strategy is a missed opportunity. If you are unclear on how your pension fund is invested, or if your adviser has never discussed an investment strategy with you, the chances are that none exists. At a minimum, your pension investments should be aligned with your risk tolerance, time horizon, and retirement objectives. We would recommend seeking a second opinion if any of the following apply to your pension;
- your adviser has suggested allocating a portion of your pension to cash
- your pension is invested across funds with different risk ratings,
- any part of your pension in an unregulated investment.
See our Frequently Asked Questions for company directors.
Check us out in the media by clicking on this image
If you would like to find out more give us a call on 01 546 1100 or book a no obligation Zoom call with us here.
If you want to reduce your corporation tax bill and turn company profits into personal wealth we can help.
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The material and information contained on this website is for general information purposes only. Neither the writer nor Highfield Financial Planning Ltd makes any warranty as to the completeness, accuracy or reliability of the information or the suitability or availability of products or services, referred to on the website, for any purpose. You should not rely on any information contained on this website as a basis for making any financial, legal, taxation or other decision. The information presented does not include all the considerations which are relevant to the topic discussed as to do so would render it un-readable. When considering any financial issue you should seek the advice of a suitably qualified adviser.
BOOK A FREE NO-OBLIGATION CHAT
By Telephone 01 546 1100
Use the Form on this Page
Email to [email protected]
Book a Zoom call with us here.
Happy to start the process? Click here to complete a factfind and tell us your objectives
The material and information contained on this website is for general information purposes only. Neither the writer nor Highfield Financial Planning Ltd makes any warranty as to the completeness, accuracy or reliability of the information or the suitability or availability of products or services, referred to on the website, for any purpose. You should not rely on any information contained on this website as a basis for making any financial, legal, taxation or other decision. The information presented does not include all the considerations which are relevant to the topic discussed as to do so would render it un-readable. When considering any financial issue you should seek the advice of a suitably qualified adviser.
Highfield Financial Planning in the Media
The Sunday Times
In the sport of target pistol shooting there is a saying, “slow is smooth, smooth is fast”, which refers to the way to approach drawing and firing a pistol quickly and accurately. The learner shooter who focuses on practising the correct technique slowly, only building in speed later, will win the day nine times out of ten.
The Sunday Independent
A pension is a term that can seem distant to many, especially if you’re at the beginning of your career. But it is a vital part of long-term financial planning, designed to provide you with a source of income in your retirement years. As the pension landscape continues to evolve, understanding the fundamentals and staying informed about the changes is crucial. So, what do you need to know?
The Sunday Times
I have been sitting on about €140,000 in my current account for the past year. It’s what was left over when I sold a property. I keep reading about inflation and how banks are paying no interest and might start paying negative interest, and so on.
The Sunday Times
Would-be investors have a difficult decision to make when considering their options. If they are going to increase their wealth, they will need, at a minimum, to beat inflation and whatever they are paying in charges.
Business Post
If you’re at the beginning of your working life or are simply new to pensions, we look at what you need to know
The Sunday Times
The phrase “Morton’s fork” can be traced back to the time of King Henry VII in the 15th century, when John Morton, then the Archbishop of Canterbury and lord chancellor, rationalised that a tax levied by the king was just.
Sunday Independent
Q I HAVE €150,000 which I want to invest for between 10 and 15 years — with a view to using it to fund my retirement in the future. I’m 50 years old. I am interested in property investment and had considered using the lump sum to buy a property outright.
The Sunday Times
If I asked 10 people on the street how long they thought pensions had existed, what do you think they would say? Since the 1960s, the formation of the state, or Victorian times?
Business Post
No matter how far away you are from retirement, it is always a good time to start a pension or to build up your contributions. And the tax benefits are considerable, writes Siobhán Maguire
Sunday Business Post
The area of pension guidance can be a minefield, but it’s one which Highfield Financial Planning is happy to negotiate for its clients
Sunday Business Post
Eoghan Gavigan, a specialist investment adviser and certified financial planner at Highfield Financial Planning, has advice for those looking to start a pension, writes Siobhán Maguire
About Highfield Financial Planning
We provide superior advice on Financial Planning services to business owners, professionals and their families. The principal of the firm Eoghan Gavigan has over 27 years’ experience in banking and finance across Treasury, Lending and Wealth Management and is a Qualified Financial Adviser (QFA) and a Certified Financial Planner (CFP). The CFP qualification is the world’s most respected industry designation, held by only a select number of advisers. As Specialist Investment Advisers we can provide you with detailed investment advice on your pensions and investments.
We want you to be comfortable in your dealings with us. We provide a number of suggestions here for ways that you may be able to obtain comfort that we are the right Financial Planner for you.
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