Q. What is an Executive Pension (EP)?

A. It is a tax-exempt Revenue approved Pension vehicle that allows business owners and key employees to get the most value from their pension contributions.  It allows a business owner to transfer surplus profits from the company to his/her EP plan with no liability to Benefit-in-Kind


It is a very flexible means of building a retirement pot suitable for a business owner or senior employees.

  • Business owner who may want to ‘catch’ up on his Pension contributions.
  • Back-funding is a flexible feature which allows the EP owner to potentially back-fund for years where he was in salaried service but not pensioned.
  • If the company makes the payments to the business owners EP plan, contributions are paid gross with no BIK liability
  • The Company gets corporation tax relief on the employer contributions in the year made

Process – How to qualify for an Executive Pension

Checkmark Limited company statusEmployer can make generous contributions -which are not restricted by age related limits but are linked to salary, age, and years to retirement
Checkmark Business owner or key employee must have Schedule E Income40% tax relief on any personal contributions 
Checkmark Availability of excess company profitsNo Personal tax liability for the EP owner, any investment growth is tax free
Checkmark Must be set-up in a trustFlexible can decide each year on contribution level and can stop and re-start as suits employer

EP- Maximum annual contributions levels

Example- Maximum EP Contribution Levels

  • Max. Contribution limit = 2/3 Salary *Capitalisation factor less Retained Pension / yrs. to retire
  • Cap. Factor is higher for a male with a spouse or civil partner.
  • An Earnings cap of €115,000 applies to contributions.

 Advantages of an EP for Business Owner ‘Versus’ Sole Trader Personal Pension

Taxation Pensions – @ Retirement

  • The maximum individual pension benefit in Ireland is €2 million known as the Standard Fund Threshold
  • Individual with a retirement pot of €2 million, would receive a tax-free lump sum of €440k on €500k of benefits drawdown.
  • An individual who accumulates Pension Benefits greater €2 million will pay tax of 40% on all these pensions assets more than €2 million


There’s a lot of moving parts when it comes to retirement planning while running a business.

If you’d like to hear the full list of the options available to you, please e mail me using: Andrew. Cree@ imperiuswealth.com then I would be happy to schedule a time for a 15 min. chat about your goals and how I can help you achieve them.Imperius Wealth Ltd are group of UK Chartered Wealth Managers & Irish resident Certified Financial Planners (CFP®) all with over 20 years’ experience advising individuals and retirees with cross border financial & pension planning.