Another option for employers to consider is executive pension plans (EPP) or small self administered pension scheme (SSAPS). These are one-person pension arrangements often used by the director(s) of a company and/or for key employees. They can be set up parallel to a group pension scheme. An executive pension is a great way to plan the sale/exit from your business, as lump sums into your pension avoids capital gains tax.
An EPP or SSAPS in Ireland is a type of defined contribution pension plan designed to provide key employees and directors with a retirement benefit that is above and beyond the benefits provided by a standard defined contribution pension plan. We place great emphasis on this type of pension arrangement as setting it up on a self-administered basis gives the individual a much wider scope for investment options.
There were a number of changes with regards to reporting and regulations (called IROPS II) of EPPs and SSAPS. If you have received a letter from your provider about these changes and you want to understand how they affect you, please contact us for assistance. If you opened your plan in 2021 you may be required to close your account or transfer to a new “Master Trust” arrangement. We would be happy to help you navigate what is the best option for you based on your personal circumstances.
EPPs are typically funded by the employer and offer benefits that are based on the individual’s salary, length of service, and other factors. They may also include additional features such as survivor benefits, disability benefits, and death benefits. EPPs are regulated by the Irish Pensions Authority and must comply with certain legal requirements in order to be considered valid.
36% of Irish workers will rely on the State Pension as their only form of income in retirement
Only 47% of the entire Irish workforce has a pension (occupational pension, personal pension or both)
Only 30% of self-employed people contribute to a pension
Women will have 38% less to live off in retirement when compared to men