The Finance Act 2022 was enacted on 15 December 2022 with a change to the PRSA in Ireland.
The government’s goal is to make Pensions simpler to understand and this is a welcome change to PRSA’s in Ireland which comes in to effect on 1st January 2023.
Confirmation – Benefit in Kind for an employee has been removed for a PRSA.
This is huge for business owners, who can contribute as much as they want in any one year with just the stand fund threshold (2 million). Pervious to this business owners could contribute to an Executive pension but it has some limits.
Positive change for PRSA members – now have same tax treatment as occupational pension scheme members in relation to the employer contributions to their pension scheme.
Business owners paying in to a PRSA – only limits relate to the Lifetime Pension Fund Limit (Standard Fund Threshold, currently €2M)
Employer’s capacity to fund a significant contribution and the profits/corresponding tax that the Employer is paying.
There is many benefits with a PRSA compared to other Pension schemes in Ireland
There is no need for additional trustees.
IIORPS II legislation does not apply.
Exit Penalties – No charge to move you pension elsewhere.
There is currently no funding test that is applied to an employer contribution to a PRSA (no upper limit in terms of funding).
PRSA’s are also suitable for a spouse, family members or any other employee.
Full death benefit paid to the estate.
This makes it easier for the end customer and less complicated than before.
Please get in contact today and move to this more tax efficient pension scheme.
