PRSA Funding

Up until the end of 2022, for a Company to make a large Pension contribution to an individual’s company pension plan, an actuarial-based ‘Max Funding’ calculation was needed to be done to ensure that the contribution was within Revenue limits. This calculation factored in the individual’s current age, marital status, the existing pension fund size, his / her salary, the years of service, target retirement age.

However, Finance Act 2022 has removed this Max Funding calculation for Company contributions to PRSAs.

Therefore, effectively there is no limit on the amount that the Company can contribute to an individual’s Pension PRSA contract, subject to the €2m Standard Fund Threshold (SFT).

The Company contribution is not a Benefit In Kind (BIK) for the individual and is a deduction for Corporation Tax purposes.