Pension Scheme Advice & Design
We have extensive experience and expertise in the area of retirement planning and pension scheme advice. Retirement planning is a crucial part of financial planning and we provide pension scheme design solutions to business owners, corporate executives and self-employed individuals.
We can assist in designing the retirement solutions that meet both individual requirements as well as the needs of a business. Our areas of expertise include:
- Single or multi member occupational pension schemes, both defined benefit and defined contribution scheme.
- Individual arrangements such as Small Self-Administered Schemes (SSAS), Self-Invested Personal Pension Plans, Personal Retirement Savings Accounts (PRSA) and Personal Retirement Bonds (PRB).
- Post Retirement Vehicles such as Approved Retirement Funds (ARF), AMRFs and vested PRSAs.
- Annuity contracts where applicable.
When putting in place the most appropriate retirement vehicle the main issues that need to be considered include the following:
- The overall income levels of the individual
- Age and the retirement term applicable
- The level of available income to invest
- Status of employment
- Investment term and philosophy
- Attitude to investment risk
- The tax position of the individual and the business
What is a defined contribution scheme?
A Defined Contribution (DC) pension scheme is the most common pension arrangement for employees and company directors. Such an arrangement requires an employer contribution and also facilitates employee contributions. Depending on the type of defined contribution plan (i.e. a Small Self-Administered Scheme or an ‘Insured Scheme’ held with a life assurance company) the member will have varying levels of control over how the contributions of their plan are invested. The value of the fund will depend on the level of retirement contributions made during term of the plan combined with the investment performance of the assets held within the retirement plan.
What is a defined benefit scheme?
A Defined Benefit (DB) pension scheme is a type of retirement arrangement in which an employer promises to provide a specified monthly benefit on retirement to members. The level of payment is determined by a calculation based on the employee’s final salary and the number of years’ service completed by the member rather than depending directly on the investment returns of the pension plan. The contributions are generally made by both the employer and employee. However, the employer and trustees are generally responsible for determining the level of contributions that are required to provide the promised benefits to existing, previous and future employees.
In recent years there has been significant pressure on the funding levels for Defined Benefit schemes. This has resulted in many of such schemes being wound up or benefits being significantly reduced which has affected members’ expected retirement benefits. We have provided advice for members of DB schemes and have outlined potential alternative options available to them. Before making any decisions relating to the options available to members of DB schemes it is crucial that professional advice is sought.