Business Owners

At a minimum, Irish companies must legally offer a Personal Retirement Savings Account (PRSA) arrangement to their employees. Although compulsory, it can be great for your company and the employee. There are a number of alternative arrangements to a PRSA as follows:

This is the minimum legal requirement in Ireland. Southeast Financial Services can set this up quickly, communicate to your staff, and train your payroll administrator.

The key points of a PRSA arrangement are:

• Employer does not have to contribute
• Employer must facilitate employee contributions via payroll
• Employee’s decision to avail of the PRSA provided by the employer or go private.
• PRSA belongs to the employee and there is no trustee requirement.

Contributions by the employer to the employee’s PRSA are treated as a Benefit in Kind and are not tax efficient. If, as an employer, you want to contribute you should get advice from an IFA on changing the structure.

Contributions by the employer and the employee fall under the individual’s revenue limit based on their age.

As an employer, you may want to provide a company pension to your employees. This is a tax efficient way of providing extra benefits as part of the job. There are a number of advantages:

• Employer contributions do not count towards the individual’s revenue limits (above)
• Employer contributions are treated as a business expense and avoid Employee PRSI
• Staff retention and satisfaction is improved with the extra benefits
• Auto Enrollment may be on the cards for Ireland, and you will be ahead of the curve
• The vehicle you use for your staff depends on what benefits you want to provide. If you are a limited company there is a number of options available.

For Sole Traders, Personal Pensions are very popular, reducing your tax bill annually and also saving for a better retirement. We can talk you through the various options available to you, identifying the right company for you and by advising you on how much you should and could save in order to secure a comfortable retirement.

For Limited Companies, Executive Pensions are an excellent way to ensure that you are funding for employer and employee pensions in the most tax efficient manner. You can also transfer any old pension arrangements into your new company pension. Funding limits are higher than the normal personal thresholds and contributions by the business can reduce your Corporation Tax Liability. They can be set up in parallel to the company group scheme or PRSA.

This is an exceptional way to plan sale/exit from your business, lump sums into your pension can avoid capital gains tax and income tax. Planning in advance and getting money advice from Southeast Financial Services can save you a significant amount of tax in the future.

A Small Self-Administered Pension (SSAP) is a corporate pension scheme with 12 or fewer members. A SSAP is established under trust by your employer, for your benefit. Each director should have their own SSAP and this allows more flexibility in terms of investments that the SSAP can make. It should be noted that you do not have to be a director of a company to establish a SSAP. Any employee can set up a SSAP with the permission of your employer.

Some benefits of the Small Self-Administered Scheme:

• Allow self-direct investment into wider areas such as shares or commercial property
• More control and privacy as you are not part of a wider group scheme and therefore get to choose your own investment vehicle
• Ease of trusteeship with simple training requirements

Also an exceptional way to plan sale/exit from your business, lump sums into your pension can avoid capital gains tax and income tax. Planning in advance and getting money advice from an IFA can save you a significant amount of tax in the future.

Group Schemes are arranged for all staff, with rules tailored by the employer. For example, the employer may only offer the pension to employees who have been with the company for 2 years, or after their probation ends.
The key points of a group scheme offering are below:

• Pension Administrator & Fund Manager chosen by the employer
• Deduction taken at source from payroll
• Trustees can be internal or external
• Contributions can be voluntary or mandatory
• Employer must make a “meaningful contribution” but can choose what level they want to contribute in addition to that.
• Employer contributions are treated as a business expense and not subject to Employer PRSI
• Additional benefits may be added on to complete the employee benefit package.

Contact us and we will take the company objectives to market and comes back with the best solution for your company needs.

Tax relief makes setting death benefit through a pension attractive. Employers can also add on serious illness, income protection, and health insurance. Most benefits can be treated as a business expense, while some are treated as a benefit in kind.

With a list of employees’ dates of birth and salaries, Southeast Financial Services will price a group benefit scheme with no obligation. Contact us for more information.

Any Occupational Pension (Company) Scheme is a great way to attract and retain talent to your organization in an incredibly tax efficient manner. It can also make a huge difference to your employee’s overall retirement position in the future.

Contributions made by the company into an Executive Retirement Plan can usually be offset against Corporation Tax as an allowable business expense (subject to Revenue limits).

Contributions made by the individual scheme member to his / her executive pension plan are tax deductible for the individual against net relevant earnings. The current maximum limits for income tax relief are as follows:

Age	Maximum Tax relief as % of Earnings (NRE)
< 30	15%
30-39	20%
40-49	25%
50-54	30%
55-59	35%
> 60	40%

The limits above are capped to a maximum earnings ceiling of €115,000 for 2011.

It is possible to backdate personal once-off contributions paid in the current tax year, to the previous tax year, once the contribution has been made before Oct 31st. It also possible to carry forward any excess contribution made in order to gain tax relief in future years.

We can provide members of defined contribution group pension schemes the following independent advisory services:

Pension Funding Review – we can analyse your pension position, by looking at your target pension, your contribution level and your pension investment performance.

Leaver options – when leaving service of your current employer, you will typically be offered a number of leaving service options with regard to your accumulated pension fund. We can help individuals understand what these options are and also explore the pro’s and con’s of each.

AVC investment - Members of group schemes may wish to look at external pension products for their AVC contributions.

If you are happy with our service, we would be delighted to continue our relationship with you, in other areas of your important money matters such as, financial planning, mortgage advice, Investment/Saving, retirement planning and personal protection, please browse these links for more information.

On death, the shares of a deceased director form part of their estate. Those who inherit the shares may not want to get involved in the business or conversely the surviving shareholders may not want the next of kin to come into the business. The most feasible option is to sell shares back to the surviving shareholders. This would require the shareholders to produce a substantial lump sum.

The solution is business protection – an arrangement can be put in place whereby on the death of a shareholder, funds become available to buy shares back from the next of kin. There are a number of different ways businesses can protect themselves in the loss of a partner, director, or key person to their business.

• Personal Shareholder Protection
• Partnership Protection
• Corporate Shareholder Protection
• Key Person Insurance

At Southeast Financial Services we ensure the most efficient and productive agreements are put in place by involving your accountant and legal advisor; ensuring nothing is left to chance. It is important to review these arrangements annually as the business grows.

Many businesses will not have employees with the same knowledge, experience, judgement and reputation as the deceased employee. Sourcing an external candidate and in particular, the recruitment and training process, can be slow and expensive.

The effect of losing key staff goes well beyond simply the cost of their salaries and the cost of replacement. As they're central to your businesses, their loss will knock on to the bottom line. You can insure for loss of profits too!

Here we are talking about insurance to protect interests in the event of long-term illness or death. Families may want to sell their stake in the business but the remaining members in the business may not be able to afford to purchase but do not want those stakes held by newcomers.

When a business takes out a loan or raises finance the lender is quite likely to require a personal guarantee or a charge on their personal property. This especially applies to small and new businesses. So what happens if these guarantors become seriously ill or die? The lenders may well be in a position to call in the loan. What happens then? Insurance can be put in place to pay-off the loan and free the business and the guarantor's family.

• Critical Illness / serious Illness
• Any death benefits can be coupled with serious illness benefits
• Protection for the business if one of the key players suffers a serious accident or illness

A Tax Efficient Way of Taking Care of Key Employees

If one of your most valued employees was to suffer a long term illness, injury or accident, you’d like to think that they’d be financial secure. Executive Income protection is a valuable benefit to the Employee. They have the peace of mind in knowing that they will be financially secure in the event of long term illness. For the Employer, it is an excellent benefit to be able to provide such Employees. After a defined deferral period (e.g. 4,8,12 or 26 weeks) the policy can pay up to a maximum of 75% of an Employees pre-disability income, less social welfare entitlements.

Employers have the peace of mind also that they are no longer under the moral or financial pressure to continue to pay an Employees wages indefinitely, which can be a huge drain on finances.