Self-Administered Pension Schemes

Self-Administered Pension Schemes

Quest Capital Trustees located in Dublin, Ireland operate Self-Administered Pension Schemes (SAPS) for clients.


Planning for Retirement

Providing for your retirement is extremely important. Changes in the global market place over the past number have years have shown that you need to be aware of and have control of all aspects of your pension including:

  • Planning for retirement in advance to ensure your retirement targets can be met
  • Having control over the investments within your pension

A SAPS is an ideal solution to these issues that benefits from transparency in relation to fees and investments whilst offering you control over the investments (within allowable parameters) within your pension and associated costs.


What is a Self-Administered Pension Scheme (SAPS)?

A SAPS is a low cost, tax efficient means of providing for your retirement. It is a pension established by an employer that is suitable for company directors and senior employees. It can also be set up by the employer for a salaried employee.

A SAPS allows you control the choice of investments in your retirement fund in conjunction with your financial advisor. Unlike other types of occupational pension scheme a SAPS gives you the opportunity to control every aspect of your retirement planning – the investments, the risk, the cost.


What advantages does SAPS have over a traditional occupational pension plan offered by an Insurance company?

A SAPS offers signification benefits when compared to a traditional occupational pension plan. The main benefits can be summarized in a number of words – flexibility, risk management and cost control.

You chose what you want your SAPS to invest in (subject to rules).
Investments are chosen by the you in conjunction with your financial advisor and benefit from tax free growth during the life of the scheme.

Risk Management
When you control the investments of your SAPS you control the level of risk within your SAPS.

Cost Control
By controlling the investments within the SAPS you control the costs associated with your SAPS.


How does a SAPS work?

A SAPS is set up a set up as a standalone trust. Quest Capital Trustees Ltd (Quest) act as Pensioner Trustee. When certain conditions are met a SAPS will be granted ‘exempt approval’ by the Revenue Commissioners.

It is this exempt approval that gives the SAPS significant tax benefits both for the employer and the scheme member. You can make the investment decisions associated with the SAPS. As a SAPS is set up as a trust so the assets of the SAPS are legally separate from both the company that set up the SAPS and Quest.


Are there any other benefits of a SAPS?

Yes there are significant benefits for both the employer and employee

For the Employer

  • Employer contributions to the SAPS (within Revenue limits) are allowed as an expense for Corporation Tax
  • Employer contributions to the SAPS (within certain limits) will not result in an income tax liability for the scheme member
  • The assets of the SAPS do not form part of the employers assets and as such are ‘out of reach’ of the creditors of the company
  • Employers contributions to the SAPS can be varied each year to suit the financial circumstances of the company

For the Employee / SAPS member

  • Employer contributions to the SAPS do not create an income tax liability for the employee
  • Personal contributions to the SAPS (within Revenue limits) are allowed against the employees income tax
  • Benefits can be accessed from age 50 (in certain circumstances)
  • The SAPS member can control the investment of assets in the SAPS, this can be a hands on or hands off role, the level of involvement is up to the SAPS member

Other benefits

  • A SAPS is an ideal way of rewarding and retaining key staff without creating a tax liability for them
  • SAPS can be used as part of an efficient business exit plan for shareholders in a company
  • There is complete transparency of all fees associated with a SAPS
  • All income and gains of a SAPS are exempt from Income Tax


Taking benefits from a SAPS

Benefits can be taken from a SAPS in 2 ways:

Option 1
Take a lump sum of 25% of the value of the SAPS (see *) and Invest the remainder in an Approved Retirement Fund (ARF) or take the balance as taxable income (see**)

Option 2
Take a lump sum of up to 1.5 times final salary (see* and **) and Purchase an annuity (annual income) with the remainder.

* The maximum tax free lump sum available is €200,000 any lump sum paid in excess of this will limit will be taxable.

**A lump sum of 1.5 times salary is available with 20 years’ service with the employer, where service is less than 20 years the lump sum may be restricted.

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