Group PRSA’s, now more than ever are an attractive alternative to Group Defined Contribution Schemes as a result of there being no employee BIK payable on employer contributions since 1st January 2016.
The removal of employer BIK on 1/1/23 have made PRSA even more attractive because of massive potential funding capacity into PRSA now…ie potentially up to the €2million pension cap.
Benefits to Employer:
- There is no trustee requirement for Group PRSA’s.
- The company can contribute tax efficiently for individual employees… 12.5% corporation tax benefit.
- Additional death in service or Income protection schemes can operate tax efficiently alongside a Group PRSA.
- There is no salary and service restriction based on contributions which apply to Master Trust arrangements. Contributions up to pension cap of €2million are realistic.
Benefits to Employee:
- The employee can make contributions and get tax relief, as per current revenue age related guidelines (between 15%-40% of salary).
- The growth of the fund will be exempt from growth taxes.
- The fund can be accessed anytime from age 60. (from age 50 in case of early retirement via salary deduction group scheme)
- The full fund is payable to next of kin in event of death of PRSA holder before retirement.