In quick succession to the introduction of Master Trusts for One-Person Company Pension Plans and the announcement that Auto-Enrollment will commence in 2024, the Finance Minister Paschal Donohoe announced significant changes for Personal Retirement Savings Account (PRSA) at Budget time.
The changes, copper-fastened in The Finance Bill 2022, mean that Employer Contributions made on behalf of an employee or director to a Personal Retirement Savings Account (PRSA) will no longer be treated as Benefit in Kind (BIK).
With effect from the 1st of January 2023, substantial Employer Pension Contributions can now be made to a PRSA or an Occupational Pension Scheme without having to worry about the implications of BIK.
In addition to Employer Contributions, this change allows an Employee or Director to pay the Age-Related Funding Percentage of between 15% and 40% of their salary into a PRSA and claim tax relief at their Marginal Tax Rate.
From our perspective at Smart Finance, we welcome these changes and see them as part of a strategy to enhance choice and flexibility while also making it more attractive for clients to engage with their advisers to discuss their individual Retirement and Pension Planning needs.
As always, we are available to discuss how these changes can benefit you and we will keep you updated as more information becomes available.
Pat Matthews Certified Financial Planner
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We can help take the effort out of this for you by demonstrating how this would work for you and your family and providing you with one cohesive Holistic Lifestyle Financial Plan.
You can arrange a meeting by clicking here to access my diary, email info@smartfinance.ie or call 087 8144 104.
