Aviva Executive Pension Plan

For the Aviva executive pension plan the minimum age is 19 next birthday and the maximum age is 67 next birthday.

Any employee or company director whose income is taxed under Schedule E. Members can only use money they’ve earned from an employment that falls within this category. Income outside of members’ employment remuneration can’t be used to invest in an executive pension. The likes of rental income, foreign income and untaxed interest are not eligible.

There’s no limit to the amount a member can pay into their executive pension plan – and they can increase their contributions at any time – but tax relief is only available on amounts up to a certain level depending on their income, age and Revenue limits. This is set out in the table below (July 2020):

There’s a limit on how much of a member’s earnings can be taken into account for the purposes of the above percentages. The maximum earnings limit is currently set at €115,000 (in 2020). So, if a member’s earnings are greater than this figure their tax relief will only be based on their earnings up to €115,000 – anything above that limit doesn’t qualify for tax relief.

Tax relief reduces the real cost of a pension. Members don’t have to pay tax on any money that they put into an executive pension – once it falls within the limits outlined earlier. The tax they save is calculated at the highest rate of income tax that they pay (20% or 40%). An example of how this works is set out below:

Monthly pension contribution = €100
Tax relief @ 40% = €40
Total net monthly cost to you = €60

If you pay income tax at the 20% rate, your tax relief will be €20 and your total net monthly cost will be €80.

Employers usually take the member’s contributions directly from their salary – in which case the tax relief is instant. Employers receive tax relief on any contributions the company makes towards a pension plan for employees (once the contributions are within the agreed limits).

If a member changes jobs, they can take their pension plan with them, so they aren’t tied down to working for just one employer throughout their career. On the other hand, where a new individual becomes eligible to join an executive pension plan they will usually be able to transfer-in their accumulated pension funds from previous employers.

No, once a member has put money into an executive pension, they can’t withdraw it until they reach age 60 unless they retire early.

If a member has to retire early because of ill health, they can take their benefits from their executive pension immediately.

If a member dies before they retire, we’ll pay the value of their Aviva executive pension to their estate.

No. They can’t transfer the rights to their Aviva executive pension plan to a bank or another institution as security for a loan.

The minimum investment period for paying regular contributions to the Aviva executive pension is 3 years.

Employers and/or the member pay regular or single contributions to the Aviva executive pension. The Aviva executive pension can also accept transfers from other executive pensions – these would usually be paid as electronic fund transfers from other institutions or may come via you as Trustee.

Employers and/or the member can pay a single contribution at anytime into the Aviva executive pension. This can be done instead of, or as well as, paying regular contributions.

Yes. Employers or the member can increase contributions at any time. They can also reduce contributions to the minimum allowed (which is €100 monthly or €1,000 yearly) or take a break from making contributions.

However, don’t forget that reducing or stopping contributions will affect the value of the member’s pension fund when they retire. Before they make any decision to reduce or stop contributions, we would recommend members to speak with a Financial Broker.

Yes. When you take out an executive pension, you can choose to have contributions increase by 5% each year. Before making any decision on your contributions you should speak with your Financial Broker.

You can, but you don’t have to. We want to help our customers make the most of their money and are constantly driving innovation and better outcomes for our pension investors. We believe that a well-managed pension scheme will deliver the best outcomes for the member and that the role of the Trustee is critical to this.

The role of the Trustee can be an onerous one and for many companies that are focused on running their own business an overhead and\or time constraint that they don’t need.

Aviva have appointed Freedom Trust Services Limited as a preferred provider of Trustee services for all new executive pension plan schemes. We have done this to ensure that our customers can avail of a Trustee service which they can have confidence in and that they can focus on the really important business of running their business without worrying about the stewardship of the pension scheme. We have chosen to appoint Freedom Trust Services as preferred providers because:

• They are independent from Aviva,
• They are approved by the Revenue as a Pensioner Trustee,
• Founder members of the Association of Pension Trustees in Ireland (APTI),
• Members of the Irish Association of Pension Funds,
• Board members have more than 50 years pension experience between them.

Freedom Trust Services Limited is not a regulated financial service provider.

Our separate ‘Retirement Guide’ explains all of the various options that may be available to you at retirement or talk to a Financial Broker today!