Company pensions
Occupational and executive schemes for owner-directors and employees, set up through your company and funded before tax.
What it is
A company pension, also called an occupational pension scheme, is set up by an employer for its directors and staff. The company and, in most schemes, the employee both pay in, and the money is invested until retirement. For business owners it is one of the most efficient ways to take value out of a company, because employer contributions are treated as a business expense rather than as salary.
Two groups use company pensions: employers who want to offer a scheme that helps them attract and keep good people, and owner-directors building their own retirement fund through the business. The rules, limits and paperwork differ from personal pensions, and since the IORP II regulations and the growth of master trusts, so does the way schemes are run.
Who it is for
- Owner-directors building a pension through their trading company
- Employers setting up a scheme for staff, including alongside auto-enrolment
- Companies reviewing or consolidating an existing scheme
- Employees who want to understand and get the most from the scheme they are in
How it works
The company sets up the scheme, often through a master trust that handles governance and compliance. Contributions from the employer, and usually the employee, are invested in a range of funds. Employer contributions are a deductible business expense and are not treated as a benefit in kind on the employee, which is what makes them so efficient. At retirement the member can take a tax-free lump sum and then choose between an Annuity (also known as a pension for life) or an ARF (Approved Retirement Fund).
The tax treatment
Employer contributions to an occupational scheme are not subject to the age-related percentage limits that cap personal contributions, and they are not counted as taxable pay for the employee. Instead, the amount that can be funded is set by Revenue’s maximum funding rules, which look at salary, service and the pension already built up. This is why an owner-director can often move far more into a pension through the company than as an individual. Employee contributions still receive income tax relief at the member’s marginal rate.
Why talk to BDS
Company schemes carry real responsibilities for trustees and employers, and the funding rules reward getting advice. We set up and review schemes for businesses across Limerick, Dublin and Galway, handle the comparison across providers, and make sure owner-directors fund to the maximum the rules allow. Barbara Sheahan leads on employer benefits and David on the pension funding side.
Common questions
More than you might expect. The limit is based on Revenue’s maximum funding rules rather than the personal age bands, and it depends on your salary, service and existing pensions. We calculate it for you.
No. Employer contributions to a Revenue-approved scheme are not a benefit in kind, so there is no income tax, USC or PRSI on them for you.
Yes. We check charges, fund performance, governance and whether consolidating older schemes would help, then tell you what to keep and what to change.
We will tell you whether your current scheme meets the requirements and what steps to take. It depends on your workforce and what you already offer.
Other kinds of pension
Personal pensions
AVCs
PRSAs
Executive pensions
Important information
Contribution limits, tax relief rates and thresholds are set by Revenue and apply to the 2026 tax year. They can change in future Budgets and Finance Acts, and the right approach depends on your own circumstances. The examples are illustrations, not projections of what you would receive.
David Sheahan Insurance & Investments Ltd t/a BDS Financial is regulated by the Central Bank of Ireland. Reg. no. 115813. Offices in Limerick, Dublin and Galway.
This content is general information and is not financial advice. The value of investments can fall as well as rise.
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