Pensions & Retirement Planning

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State Pensions

Your State pension will provide you with a basic level of retirement income, provided you qualify. The State pension is intended to ensure that everyone receives a basic standard of living in retirement. For example, the full State Pension (Contributory) currently (March 2018) is €243.30 per week or approximately €12,000 per annum. The State pension increases by €10 per week for those over age 80.

Some people do not receive a full State pension because they have not been credited with enough PRSI contribution payments. In these cases, lower levels of State pension may be paid.

If you want to find out more about State pensions you should look for information on the Department of Employment Affairs and Social Protection website www.welfare.ie .

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Tax Relief on Pension Contributions

If you are a member of an approved pension scheme, you can get tax relief at your highest rate on your contributions to the scheme. There are various rules that pension schemes must meet in order to get the tax relief and there is a limit to the amount of the relief. Since 1 January 2011 you pay PRSI and the Universal Social Charge on your pension contributions.

The maximum pension contributions, in any one year, for which you are entitled to tax relief, is related to your age and is expressed as a percentage of your gross income. The maximum gross income figure for relief purposes is €115,000.

The percentage relief limits are:

AgeLimited to
under 30 years15% of *net relevant earnings
30-39 years20% of *net relevant earnings
40-49 years25% of *net relevant earnings
50-54 years30% of *net relevant earnings
55-59 years35% of *net relevant earnings
60 years plus40% of *net relevant earnings

*For employees, earnings means gross pay for tax purposes. For the self-employed, earnings means net relevant earnings, that is, earnings less allowable expenses.

You pay tax on the pension when you receive it.

Taxation of retirement lump sum

Since 1 January 2011 there is a limit of €200,000 on the amount of the tax-free retirement lump sum. Lump sum payments above that limit will be taxed as follows (in 2014 and 2015):

Amount of lump sum Income tax rate

Up to €200,0000%
€200,001 - €500,00020%
Over €500,000Taxpayer's marginal rate

Levy on private pension funds

There is a levy of 0.6% on the market value of assets which are managed in pension funds and pension plans approved under Irish tax legislation. (These include occupational pension schemes, Retirement Annuity Contracts and Personal Retirement Savings Accounts). This levy applied until the end of 2014. In 2014 an extra levy of 0.15% was introduced. This meant that the total pension levy in 2014 is 0.75% and the levy in 2015 was 0.15%. It was announced in Budget 2016 that this levy will be abolished.

Personal Pension Plans

If an employer doesn’t provide a pension for you, you will need to organise your own provisions. In some circumstances, you are permitted to get tax respite at your highest rate on your payments into a pension. When arranging a pension or Personal Retirement Savings Account (PRSA) for you, we will demonstrate how to get your tax relief at source, which is beneficial for your cash flow rather than reclaiming your tax at year end.

Want to understand your pension call CleverMoney on 01 6971228 or visit the pension Authority web site https://www.pensionsauthority.ie/en/LifeCycle/Welc...

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PRSA (Personal Retirement Savings Accounts)

If an employer doesn’t provide a pension for you, you will need to organise your own provisions. In some circumstances, you are permitted to get tax relief to your relevant income tax rate on your payments into a pension. When arranging a pension or Personal Retirement Savings Account (PRSA) for you, we will demonstrate how to get your tax relief at source, which is beneficial for your cash flow rather than reclaiming your tax at year end.

Want to understand your pension call CleverMoney on 01 6971228 or visit the pension Authority web site https://www.pensionsauthority.ie/en/LifeCycle/Welc...

PRBs (Personal Retirement Bonds)

A Personal Retirement Bond (PRB) is used by the executors of a pension system to purchase retirement welfares for prior members of their pension scheme. A PRB is a personal policy in the name of the PRB holder.

Want to understand your pension call CleverMoney on 01 6971228 or visit the pension Authority web site https://www.pensionsauthority.ie/en/LifeCycle/Welc...

Pension Transfers

Pension preparations permit you to transfer your pension welfares from one arrangement to another. The transfer guidelines are contingent on the arrangement you are transferring from and the arrangement you are transferring to.

Want to understand your pension call CleverMoney on 01 6971228 or visit the pension Authority web site https://www.pensionsauthority.ie/en/LifeCycle/Welc...

AVC's (Additional Voluntary Contributions)

If you are part of a business pension arrangement, you may find that you’re not eligible to an adequate pension at the point of your retirement to withstand the daily life you had wished for. This may be because you have not been a part of the arrangement for long enough, or because of an absence, or because you haven’t remunerated enough.

In this case, you are permitted to make Additional Voluntary Contributions (AVCs) to top up your pension. You can do this by making supplementary outgoings into your company pension scheme, or by setting up a separate plan. There are advantages and disadvantages to both types so please feel free to have a chat with us about what is best for you.

Want to understand your pension call CleverMoney on 01 6971228 or visit the pension Authority web site https://www.pensionsauthority.ie/en/LifeCycle/Welc...

Company Pension Schemes / Executive Pension

This is a pension that is used primarily for directors and senior executives of your firm. There is great flexibility in relation to how much you can contribute tax free, and in relation to how you can claim your benefits at retirement age. 


A company is obliged to appoint a preferred pension provider and allow access to payroll deduction if the staff members ever wish. CleverMoney the Financial Experts can help companies meet this obligation at no cost whist keeping the company compliant with all pension board regulations. This is important as the pension board regularly conduct spot checks with fines for non-compliance.

Employers' obligations to provide access

There is no legal obligation on an employer to set up or contribute to a pension scheme. If your employer doesn't have a pension scheme or if you are an 'excluded employee', your employer will need to provide you with access to at least one Standard PRSA.

You are considered an 'excluded employee' if

  • your employer does not offer an occupational pension scheme, or
  • you are included in a scheme for death in service benefits only, or
  • you are not eligible to join the scheme or will not become eligible to join the scheme within six months from the date you began work, or
  • you are included in a scheme that does not permit the payment of Additional Voluntary Contributions (AVCs) by members.

An employer must enter into a contract with a PRSA provider and is obliged to:

  • notify 'excluded employees' that they have a right to contribute to a Standard PRSA;
  • allow the PRSA provider or intermediary reasonable access to 'excluded employees' at their workplace;
  • allow reasonable paid leave of absence, subject to work requirements, so that excluded employees can set up a Standard PRSA;
  • make deductions from payroll at the request of employees and remit these to the designated PRSA provider (employers cannot charge for deducting and remitting contributions);
  • advise employees in writing (normally on their payslip) at least once a month of their total contribution including the employer's contribution, if any.

https://www.pensionsauthority.ie/en/LifeCycle/Join...

Want to understand your pension call CleverMoney on 01 6971228 or visit the pension Authority web site https://www.pensionsauthority.ie/en/LifeCycle/Welc...

Annuities and ARFs

If you have your own pension scheme, once you reach retirement age, you will have an option to take your tax-free lump sum and use the balance to provide a pension for your retirement. What you do with the balance is an important decision, not to be taken lightly. You will have to choose between an Annuity or an Approved Retirement Fund (ARF) . We strongly recommend you take independent advice prior to making this choice.

Want to understand your pension call CleverMoney on 01 6971228 or visit the pension Authority web site https://www.pensionsauthority.ie/en/LifeCycle/Welc...

Consolidating Pensions

The days of working for the same employer for your whole working life are no more. We are finding it is more common for a person to change employers every few years. If this is you, and you were a member of the company pension scheme with each employer, you should talk to us about consolidating your pensions.

Want to understand your pension call CleverMoney on 01 6971228 or visit the pension Authority web site https://www.pensionsauthority.ie/en/LifeCycle/Welc...

Deferred Pensions

If you have one or more paid-up or deferred pension, you will have several options. Aside from leaving it where it is, you may have the choice to bring it to your current employer or to put it into an account in your own name, which is called a buy-out bond. It is always worth doing an analysis of what is the best option for you.

Want to understand your pension call CleverMoney on 01 6971228 or visit the pension Authority web site https://www.pensionsauthority.ie/en/LifeCycle/Welc...

Pension tracing and winding-up

CleverMoney also offers pension tracing and winding-up services. Many people have left pensions with their former employers and have no information on their benefits. We have successfully investigated numerous cases.
Where a company is in liquidation or receivership, we will wind up the pension in co-operation with the receiver or liquidator, and ensure that all employees have their benefits protected.

Want to understand your pension call CleverMoney on 01 6971228 or visit the pension Authority web site https://www.pensionsauthority.ie/en/LifeCycle/Welc...

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