Advantage (Corporate) Plan
The Advantage (Corporate) Plan is a regular premium, unit-linked pension plan without guarantees. It is suitable for employers who want to provide their key employees with additional income at retirement.
Advantage (Corporate) can be set up for either an individual director or an employee, and it can be a tax-efficient way for an employer to provide additional, attractive employment benefits.
The premiums are paid by the employer (the Planholder) over a fixed term of 10 to 30 years, and single premiums can be paid into the Plan at any time.
Tax-efficiency for the employer and the employee
Employers will benefit from corporation tax relief on the contributions they pay. These contributions can be offset against profits as an allowable business expense.
For the employee, the pension premiums paid by their employer are regarded as tax-free earnings, up to an amount of €8,500 per annum.
In addition, the pension Plan grows free of Irish taxes as the contributions are invested in funds that do not apply tax on the investment gains. At retirement the pension benefit payment will be subject to taxation once it is paid out.
The Advantage (Corporate) Plan also provides life cover of 100% of the investment value of the Plan. This is payable on the death of the employee assured under the Plan, providing financial protection to the employee’s dependents should they die while in employment.
A mutually beneficial arrangement
The Advantage (Corporate) Plan is a useful retention tool as it can help to ensure that an employer retains key staff. It can be structured so that the employee must stay for a minimum period of time in order to receive title to the benefits, and this timeframe is agreed mutually between the employer and the employee.
Choice for the employee
Although the employer is the Planholder, they can choose to give their employees control over how the contributions are invested. Advantage (Corporate) opens the door to the growth potential of the world’s financial markets. There is a wide range of fund options to choose from, all of which are suitable for a wide range of risk appetites.
On retirement, the full accumulated value of the Plan will be used to provide the pension benefits. The employer can also give employees a choice around how the pension benefit is paid including the age when payments will start and the frequency and amount of the payment. These decisions can be changed over the lifetime of the Plan.
For information on other features of the Advantage (Corporate) Plan, click on Features.
Advantage (Corporate) Plan – Finland