Q. I am self-employed, aged 38, and wish to set up my own pension. I like the idea of managing my own pension and I have heard about these SSAPs and self -directed trusts. Will I be allowed to buy and sell index funds, Exchange Traded Funds (ETFs) and the like and what’s the major benefit ? Peter – Clonmel Co Tipperary
A. Well done Peter on your entrepreneurial spirit. Assuming you have set up a company, you have a number of choices but essentially if you are making lots of profits, your company can invest a greater sum in your company pension than the threshold allowed in a personal pension. For instance at age 38 you could invest up to 20% of your net relevant annual earnings in a Personal Retirement Savings Account (PRSA). If you have the money in your company, you could invest 100% of your annual income in a pension for yourself, and every year. The company takes the credit – no corporation tax (12.5%) or employer’s PRSI (11.05%) on those contributions. Sadly the SSAP…Small Self Administered Pension schemes are on the way out as new directives from the Central Bank make it extremely onerous and expensive to maintain them. But you can through a trustee company still operate a PRSA account and invest directly in property, the stock market and other assets. You would need specialist pension advice and possibly trustees services. It’s not for pub advice but over time could be the best route for your pension scheme. Email me for details.