Pension Planning for Property Executives
There are three key pension issues for CEOs and other directors to consider as they approach retirement:
1. Is my pension pot fully funded?
While the earnings cap against which tax relieved Additional Voluntary Contribution (AVC) contributions can be made is reducing in 2009 by over €125,000 to €150,000, there is still significant scope for employer contributions to be made into executive and other occupational schemes. It is important that you examine your potential funding options closely in the final five years before retirement so that you can maximise this opportunity fully.
2. Will my investment strategy hold up in the current uncertain economic climate?
It is vital that a low risk investment approach is adopted by anyone seeking to achieve maximum post retirement benefit from a pension pot within the next five years. A strategic decision to adopt either a bond based or absolute return investment strategy may be appropriate for you and should be explored with a qualified adviser
3. Am I able to choose from the maximum available range of post retirement income options?
On retirement you will be given several options by the trustees of your pension scheme. These will include the option of accessing tax free cash from a portion of your pension pot, and converting the balance into either an annuity based income stream for life – which offers certainty of income but allows you to retain no access to the cash, or what is known as an Approved Retirement Fund (ARF) based approach. This approach is available to a restricted number of individuals in respect of their main pension scheme, and to everyone in respect of AVC holdings, and facilitates both the provision of an income at a level dictated by the retiree and the possibility of capital retention as part of an estate planning exercises. There are several possible routes by which a CEO or executive can achieve eligibility for ARF post retirement income treatment and these should be explored with your tax adviser.
Our Pension Planning service
At Deloitte Pensions & Investments Limited, our team of Pensions specialists advises CEOs and other directors on these and many other issues. Our solution-based Pension Consulting service seeks to eliminate the conflict of interest issues that tend to muddy the waters when employer, trustees and scheme members are all being advised by the same advisers. This service includes:
- Pension scheme design
- Defined benefit scheme restructuring
- Executive benefit restructuring
- Ongoing pension scheme consultancy
- Member communication projects
- Pension scheme investment advisory
For further information please contact:
Pat Cosgrave
Director
Deloitte Pensions & Investments Limited
T +353 1 417 2422
Paul Johnston
Senior Manager
Deloitte Pensions & Investments Limited
T +353 1 417 2482