The executive pension plan is a unique tax-efficient savings plan designed for the benefit of working business people like managing directors, CEOs and other executives. This plan is regulated by the pensions regulator. This plan works on the basis of a money purchase pension scheme. With this plan both the staffs and the employers can get the most out of their retirement funds and benefits.
Features of an executive pension plan:
In case of an employee, both the employee and employer of the company contribute an amount as per the pension scheme rules. This will improve the chances of income after retirement. The amount is contributed by the employer and paid to the pension fund set up by the pension trust. The trustees of the pension board are responsible to supervise and check if the contributions are paid on a regular basis and if the pension benefits are received by the employee on time. This plan can be topped up in order to increase the amount of income. This can be done based on the increase in the average life expectancy.
Topping up your pension plan:
You can top up your executive pension plan by increasing the amount you contribute to the plan. You can also get an individual plan to supplement your existing pension plan. Another alternative is to get an individual additional voluntary contributions plan. You can contribute an amount in this plan to increase your income after retirement. This plan will not be supported by your employer. With contributions from you, your employer and the tax person, you can boost up your benefits by signing up for extra contributions schemes.
You can choose from a range of funds to make your pension contributions. These funds depend on the pension scheme and it may also fluctuate. The entire amount af benefit depends upon the size of the fund, interest rates and tax rules at the time of retirement. You can also change the funds whenever you want. A market value reduction may be applicable which will impact your fund.
The executive pension has an advantage of tax-free benefit on retirement. All the contributions you pay are applicable for a tax relief. A variety of funds, tax-free retirement and flexibility to shift the funds are the main advantages of an executive pension plan. Another feature is that this plan allows flexible retirement. You can retire at an early age or you can wait and work until your retirement date. Altogether, this executive pension plan is very rewarding to the directors and other key employees of a firm. This is also motivating with the flexibility of retirement age and usage of funds.
Secured separate plan:
This is a secured plan completely safe for you and your family. It will not be associated in any means with the company affairs.
Flexible use of funds:
There is a range of funds to choose from. They are also investments with low risks so you don’t have to worry about recession or drop in the share market.
After your retirement, you will get the full sum collected as a retirement benefit which is also tax-free.
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