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EPP Frequently Asked Questions

What is an Executive Pension Portfolio?

An Executive Pension Portfolio (EPP) is a tax efficient occupational pension which is set up under trust for the benefit of a single member. An Executive Pension Portfolio (EPP) is self-administered which allows you to control your contributions and investments. All Davy Self-Administered Schemes are approved by the Revenue Commissioners and registered with the Pensions Authority.

Who can take out an Executive Pension Portfolio?

In order to qualify for an Executive Pension Portfolio (EPP), you must be a senior executive or director of a company in receipt of Schedule E remuneration for income tax purposes. Employees can also setup EPPs once the employer also contributes to the Scheme.

Who contributes to my Executive Pension Portfolio?

Both you and your employer can contribute to your Executive Pension Portfolio. As a condition of Revenue approval of the scheme, your employer is obliged to make a “meaningful” contribution.

How much can I contribute to my Executive Pension Portfolio?

The maximum contributions that can be paid to your scheme by you and/or your employer will depend on your personal circumstances, including company service and salary, and may be restricted by Revenue limits. There is a maximum fund threshold for Occupational Pensions known as the Standard Fund Threshold. This is currently (January 2015) set at €2.0 million.

Tax relief on contributions is restricted. Only contributions paid by you will be considered for the purposes of determining maximum contribution limits for personal tax relief purposes. You will receive full income tax relief at your marginal rate on contributions within the limits set out in the table below:

Age in Tax Year Maximum contribution as a % of Employment Earnings*
Under 30 15%
30 - 39 20%
40 - 49 25%
50 - 54 30%
55 - 59 35%
Over 60 40%

Source: Davy

The rate of 30% applies to certain specified occupations irrespective of age.

Your company can make contributions on your behalf. Such contributions are not subject to tax in the hands of employees and are not considered for the purposes of determining maximum personal contribution limits for personal tax relief purposes. The amount the company can contribute will depend on your company service and salary, and is usually in excess of the maximum personal contribution limits.

* Earnings from your employment are capped at €115,000 for 2014. (Part 30 of the Taxes Consolidation Act (TCA) 1997 as amended.) To the extent that you pay contributions in excess of the limits above, tax relief would be carried forward to future years.

How can I make contributions?

You and your employer can make contributions to your Davy Select Executive Pension Portfolio in the following ways:

  • Electronic Fund Transfer (Ad hoc or Standing Order)
  • Cheque or bank draft

How often can I make contributions?

You can make a contribution at any point in time.

Is there a maximum level of contribution?

There is a limit placed by Revenue on the maximum size of your pension fund, which is determined by your company service and salary.

The maximum contributions that can be paid to your scheme by you and/or your employer will depend on your personal circumstances, including company service and salary, and may be restricted by Revenue limits. You cannot make a contribution which would cause your fund to breach this limit. The amount of tax relief which can be claimed on personal contributions will be restricted to the standard age related contribution limits set by the Irish Revenue Commissioners (see “How much can I contribute to my Executive Pension Portfolio?” for more information).

In addition, there is a restriction on the total amount of fully tax relieved funds that an individual can benefit from all pension arrangements, known as the Standard Fund Threshold. Currently this limit is set at €2.0 million (at January 2015).

How much of my contribution is invested?

100% - there are no contribution charges.

Can I transfer from other pension providers?

Transfers can be accepted from other pension providers including;

  • Other Occupational Pension Schemes
  • Retirement Bonds
  • Personal Retirement Savings Accounts ('PRSAs')
  • Retirement benefits established outside of the State to the extent that transfers are permitted from that Scheme

Certain conditions may apply at the time of transfer.

Can I transfer my Executive Pension Portfolio out of Davy?

The full value of your Executive Pension Portfolio is available to transfer to another pension provider such as;

  • An Occupational Pension Scheme
  • A PRSA (subject to certain restrictions)
  • A Retirement Bond
  • Retirement benefits established outside of the State to the extent that transfers are permitted to that Scheme

There are no exit penalties for transferring your benefits out of the Executive Pension Portfolio.

When can benefits be taken?

You can normally start taking your benefits from age 60 (and up to age 75 if still working). In certain circumstances, you can take benefits earlier such as if you retire from employment at age 50 or over or if you can no longer work because of a serious illness or disability. Certain professions may also qualify to retire early, e.g. sports professionals.

What benefits are available when I retire?

The amount of available benefits on retirement depends on the level of contributions paid and the investment return earned on those contributions. The Davy Self-Administered Scheme offers flexible retirement options. You are entitled to the take benefits in one of two ways:

Option 1

  • A once-off lump sum of up to one and a half time's final salary* and
  • The balance of the fund must be used to purchase an annuity

or

Option 2

  • A once-off lump sum of up to 25% of the value of the assets* and
  • The balance of the fund must be transferred to an Approved Retirement Fund ('ARF')

    *The first €200,000 of a lump sum is tax free and the next €300,000 is subject to tax at the standard rate (20% at January 2015). The maximum tax-free lump sum is subject to the limits applicable to your occupational or statutory scheme and limits set down by the Revenue Commissioners.

What benefits are payable on my death?

The value of your fund at death may be used to provide the following benefits:

  • A tax free lump sum of up to four times final salary is payable to your Estate, and/or
  • The balance of the fund is used to secure an annuity for your spouse or dependents

What are the charges?

  • There are no set up charges
  • There are no contribution or transfer charges

There will be

  • For Davy Select Execution-Only accounts, an annual dealing charge for any number of transactions. This may be subject to overseas charges for non-Irish/non-UK listed instruments.

In all cases, other charges apply.     

Please click here for more information on fees and charges

What are the risks?

For more information on the risks of investing in an Executive Pension Portfolio (EPP), please read the Pension Risks page.

Warning: The information contained herein is based on our understanding of current tax legislation in Ireland and the current Irish Revenue interpretation thereof and is subject to change without notice. It is intended as a guide only and not as a substitute for professional advice. You should consult your tax adviser for the rules that apply in your individual circumstances.