Self Administered Pensions

A Self Administered Pension Scheme is one where you invest directly in the financial/property markets as opposed to holding a pension policy with a life assurance company.

These schemes enjoy the normal tax advantages of all pension schemes. The main advantage over other forms of Pension funding is the flexibility and control that can be exercised over the scheme's affairs.

Why My Own Pension Fund?

Because it allows many options, flexibility, transparency and control. Business owners like the idea of knowing what's going on - especially when it comes to a sizeable on-going investment of hard earned money. This combination is ideally placed to give better value for money.

Flexibility: means a wide range of investment options presents itself - spanning Stock market investments, deposits, tax exempt unit funds, property, forestry.

Transparency: means no more and no less than having a handle on what's happening to your money; how funds perform from year to year and the charges incurred.

Control: puts the business owner in the driving seat.

Borrowing: borrowing within an SSAP is now available.

Investment Options

 Direct Property Investment (with borrowing)

• Shares Portfolio
• Managed/ Equity Funds
• Property Funds
• Hedge Funds
• Currency Funds
• Tracker Bonds
• Government Stock
• Deposit-based instruments

For further information contact our Sales Team 014097090 or info@orca.ie

Employer Pension Plans

This section is relevant for you if you are:

1. Already a member of an employer pension plan or

2. You are eligible to join one.

What is an employer 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 you 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.

What pension income will I get when I retire?

The income you get when you retire depends on whether your employer plan is

1.   Defined Benefit plan

With a defined benefit plan, the pension income you get when you retire is related to your final salary and years of service with the employer. For example, you might get a maximum of half of two thirds of your salary after 40 years service including State pension. With this type of plan, you can predict your pension income, based on your salary and years of service.

2. Defined Contribution plan

With a defined contribution plan you are not promised a percentage of your final salary. Instead your pension depends on the value of your pension fund when you come to retire. This in turn depends on

• The amount of all contributions paid in by you and your employer plus
• The investment performance of the pension fund less
• The amount of fees and charges the pension investment company applies.

Most employer plans are now set up as defined contributions plans, so that the final value of your pension can only be estimated. When you come to retire, your pension may be less than you expected. So, you need to examine the benefit statement that you receive each year from the trustees, and regularly review contributions.

How much should I contribute?

Your employer usually sets up a minimum contribution each month. This is often a percentage of your salary. But, you may want to save more than the minimum in order to boost your pension fund.

Can I pay extra contributions?

Yes. If you are included in your employers pension plan, your employer may also offer you a facility to pay extra contributions, called Additional Voluntary Contributions.

If you can afford to contribute more, you may want to consider AVC's, especially if you:

• Want to boost the value of your pension fund
• Do not have enough years service to give you the pension you need
• Could get more tax relief because of your age

Paying AVC's

Employers can provide AVC facilities by

• Setting up an AVC fund, either as part of the main employers pension plan or as a separate AVC plan
• Arranging a PRSA for employees who want to pay AVC's

In either case your employer must take the extra contributions direct from your salary before tax. So you get tax relief automatically.

If you want you can set up your own independent PRSA to pay AVC's but in that case you will have to arrange to pay your own contributions and claim tax relief yourself.

What if I move jobs?

Ask your employer or trustees for information about your options. If you are less than two years in the plan, you may be able to take your contributions as cash, on which you pay income tax. If you have been in the plan two years or more you have to keep your pension benefits. Usually you can keep them in your old employers plan until you claim them when you come to retire. Another option is to transfer your benefits to:

• A new employers pension plan if you are allowed
• A PRSA
• A special pension policy called a buy out bond

You need to consider your options carefully and get financial advice to help you make the right decision.

Can I retire early?

If the trustees or your employer agrees, you may be able to retire from 50 onwards. If you retire early, your pension will normally be much lower than if you continued to make contributions up to the expected retirement age for your employer pension plan. This can vary but is usually age 65.

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 income protection. 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. For more information ask any of our sales team.

What if I die before I retire?

Your plan will have rules about what the fund will pay out to your dependants if you 'die in service' benefits. Ask your employer for information about what your plan provides. You should take this into account when deciding how much life assurance you will need or when making a will.

For more information please contact our sales team at 014097090 or info@orca.ie