Executive Pension Plan

“Director / Executive Pension Plan (EPP)”

Director / Executive Pension Plan (EPP)

Executive Pension Plans (EPP) are tax-efficient savings plans set up by the company for key employees. The employer (and sometimes the employee) pays into the plan, to build a tax-efficient fund, which is used at retirement to provide tax free cash and a pension income. In effect, EPPs are money purchase occupational pension schemes and operate for the most part like any other pension scheme.

EPPs are normally established by company directors or other valued employees for their own benefit, though only the favoured can expect to be given the levels of investment that these schemes offer.

From an employer’s perspective, an EPP can form the core of a benefits package to attract, motivate and reward key executives, plus the financial benefits of contributions being allowable as a business expense and able to be set against taxable profits. Furthermore, there is no NIC liability and so extra pension contributions into an EPP can be made instead of salary increases.

The pension fund is set up under trust, with the trustees responsible for the trust’s day-to-day administration, such as ensuring contributions are paid regularly and benefits are paid out promptly.

For the individual, there is flexibility of retirement, allowing the person to retire early and hand over to others (although benefits can only be taken from age of 55) or to work well past the company’s normal retirement date.

EXECUTIVE PENSION PLANS ARE REGULATED BY THE PENSIONS REGULATOR

A PENSION IS A LONG TERM INVESTMENT, THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION.

INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM TAXATION, ARE SUBJECT TO CHANGE.

Related Topics

Pensions

State Pension

National Employment Savings Trust (NEST)

Income Drawdown

Occupational Pensions / Auto Enrolment

Personal

SIPP

SSAS

Stakeholder

Annuities

ENQUIRY FORM

*
*
*

Customer Testimonials

Our Other areas of expertise

Financial Planning

As professional financial advisers we can help you make informed decisions about your financial future, short, medium and long term.

Read more
Pensions

A well prepared pension plan which is regularly reviewed should go some way to providing you with a reasonable level of income in your retirement.

Read more
QROPS

Qualifying Recognised Overseas Pension Scheme



Read more