The State Retirement Pension is a fixed benefit (it is not salary related) and it is insufficient on its own to provide for you in your retirement. You should aim to top up the State Benefit with a Revenue Approved Plan. Such a plan provides you with a very tax efficient mechanism to fund for such Retirement Benefits e.g. Employer Contribution to your Retirement Savings Account, no Benefit-in-Kind assessment on the Employer Contribution, Income Tax relief on your own Member Contribution, tax free investment returns on the Pension Fund and a Tax Free Lump Sum at your retirement.

When you contribute to your retirement account under the plan, the real cost to you isn’t as high as you might initially think. A €100 employee contribution to the plan actually costs you €80 if you pay income tax at the standard rate of 20% and €60 if you pay income tax at the marginal rate of 40%. Income tax relief is normally given “at source” via payroll, and no tax or BIK is payable on employer contributions. There are age related limits of the relief that can be granted, but generally you can decide on how much you wish to contribute to the plan.

This may not apply to everyone but, as a general rule of thumb, you could aim to contribute (between you and your employer) about half of your current age as a percentage of your income. In other words, if you are 30 years of age, you could aim for a total contribution of about 15% of your annual income between your contributions and your Employer’s. For someone earning €40,000, that is €500 per month in total between you and your Employer going into your retirement account.

In general, members can arrange to take a transfer in from another plan, but it does depend on the type of pension arrangement you have.

Should you wish to transfer in benefits you have from a pension arrangement, please complete this form and e-mail it to: [email protected]