Executive Pension Ireland — The Company Director's Guide to Maximum Contributions

If you are a company director or owner-manager in Ireland, you almost certainly have access to one of the most tax-efficient financial structures available to any Irish taxpayer — and most directors are either not using it at all, or are using it far below its potential. That structure is the executive pension, also called a company director pension or an occupational pension scheme for controlling directors.

This guide explains what an executive pension is, why it is more powerful than a personal pension or PRSA for a director, how much your company can contribute, and what your options look like for more advanced structures like the Small Self-Administered Scheme (SSAS).

What Is an Executive Pension?

An executive pension — in Revenue's language, an occupational pension scheme — is a pension set up through your company, with the company as the sponsoring employer. The company makes contributions to the scheme on behalf of you, the member (in this case, a director who is also an employee of the company).

This is fundamentally different from a personal pension or a PRSA, which you set up in your own name and fund from your personal income. The distinction matters enormously because of how Revenue treats company contributions versus personal contributions.

Company Contributions vs the Personal Age-Related Limit

Every Irish taxpayer can contribute to a pension within their age-related limit — a percentage of their net relevant earnings, up to €115,000 per year:

Age Band	Max Personal Contribution (% of earnings)	Max at €115,000 earnings
Under 30	15%	€17,250
30–39	20%	€23,000
40–49	25%	€28,750
50–54	30%	€34,500
55–59	35%	€40,250
60 and over	40%	€46,000

These limits apply to personal contributions — what you as an individual put in and claim tax relief on. Company contributions to an executive pension are entirely separate. The company can contribute additional amounts, subject to its own rules, without touching those personal limits. This is where the real power of an executive pension lies.

How Much Can the Company Contribute?

Revenue does not set a simple percentage limit for company contributions to executive pensions. Instead, the allowable contribution is based on what is needed to fund a target pension benefit by retirement — typically a target of two-thirds of final salary, accrued over the director's service history. This is called the "approvable benefit" approach.

The Ordinary Annual Contribution Method

In practice, the most common approach is an Ordinary Annual Contribution — the company contributes a level annual amount sufficient, when invested, to fund the target benefit by the director's chosen retirement date. An actuary or pension administrator calculates this based on:

• The director's current salary (and projected final salary)
• Number of years to retirement
• Years of service already completed with the company
• An assumed investment return
• The target pension (typically 2/3 of final salary, subject to the Standard Fund Threshold)

For a director in their 40s on a reasonable salary with a shorter service history, this can result in permissible annual company contributions significantly above what the personal age-related limit would allow.

The Special Contribution (Past Service) Approach

If a director has been in business for years without building up pension savings, Revenue allows a Special Contribution — a once-off or short-series contribution to "buy back" the pension benefit that would have accrued over past service years had contributions been made all along. This can be very substantial in some cases and allows a director who starts pension planning late to accelerate funding rapidly.

Special contributions must be supported by actuarial calculations and must fit within the overall Standard Fund Threshold.

The Standard Fund Threshold — The Lifetime Cap

The Standard Fund Threshold (SFT) is the lifetime limit on the capital value of pension benefits you can accumulate in a tax-advantaged pension in Ireland. From 2026, the SFT is €2 million (it has been incrementally increased from the previous €2 million figure; confirm the current figure with Revenue or your advisor, as it is subject to Budget changes).

If your pension fund exceeds the SFT at retirement, the excess is subject to a surcharge — currently 40% on the excess above the threshold. This is in addition to any income tax on drawdown.

Corporation Tax Deductibility

Company contributions to an executive pension are deductible as a business expense for Corporation Tax. At the standard Irish Corporation Tax rate of 12.5%, every €100 the company contributes to your pension costs the company only €87.50 in real terms after the CT deduction.

If the company also has higher-rate profits (for example, from passive income streams taxed at 25%), the deductibility benefit is even greater. Either way, this makes the executive pension one of the most tax-efficient ways a company can reward its directors.

Can the Director Also Make Personal Contributions?

Yes. Even with an executive pension in place through the company, the director can still make personal contributions within their age-related limits and claim personal income tax relief on those contributions. The company contributions and the personal contributions each operate under their own Revenue rules — they do not cancel each other out.

However, both types of contributions contribute toward the same Standard Fund Threshold at retirement. So total pension wealth — from both company and personal contributions — is what counts against the €2 million cap.

Small Self-Administered Schemes (SSAS)

For directors who want more control over how their pension fund is invested, a Small Self-Administered Scheme (SSAS) is worth knowing about. A SSAS is a type of occupational pension scheme with a small number of members (typically fewer than 12, often just the director and perhaps one or two others), where the trustees — who typically include the director — have broad discretion over investment choices.

What Can a SSAS Invest In?

Unlike standard occupational schemes or PRSAs, which invest in pooled funds, a SSAS can invest in:

• Quoted equities and bonds (same as any pension)
• Commercial property — the scheme buys a property, leases it back to the company or to third parties, and the rental income accumulates tax-free within the pension
• Loans back to the employer company (within Revenue limits — subject to strict rules on amount and interest)
• Unlisted shares and other approved asset classes

The commercial property option is particularly popular with business owners who want their pension to own the premises from which their business operates. The company pays rent to the pension fund; that rent accumulates tax-free within the pension. This can be a very efficient structure for the right business.

SSAS Complexity and Cost

A SSAS comes with significantly more administration than a standard executive pension. You need a professional pension administrator and trustees, investment decisions require documentation, and Revenue oversight is more rigorous. Annual costs for a SSAS are typically €2,000–€5,000 or more, depending on complexity. This makes a SSAS most suitable for directors with meaningful pension funds and specific investment strategies — not for those just starting out.

Executive Pension vs PRSA for a Director

Since 2023, company directors in Ireland can also use a PRSA (Personal Retirement Savings Account) with employer contributions — a change that aligned Irish rules with EU portability requirements. This raised a genuine question: is a PRSA or an executive pension better for a director?

Feature	Executive Pension (Occupational Scheme)	PRSA (with employer contributions)
Company contribution limit	Based on Revenue funding rules (can be very high)	No limit from 2023 onwards (employer contributions BIK-exempt)
Corporation Tax deductibility	Yes	Yes
PRSI on employer contributions	Exempt	Exempt
Investment control (SSAS option)	Yes, via SSAS	No (standard fund options only)
Admin complexity	Higher (Revenue approval required)	Lower (off-the-shelf product)
Portability if company changes	Good (transfer to new scheme or PRSA)	Excellent (yours regardless of employer)
Minimum setup requirements	Actuarial support needed for funding calculations	Simpler to establish

For most directors who want the maximum contributions and potentially a SSAS structure, the executive pension route remains the more powerful option. For directors who want simplicity and portability — particularly those whose business may be sold or restructured — a PRSA with employer contributions has become a much more viable alternative since the 2023 rule change.

When Does an Executive Pension Make the Most Sense?

An executive pension is likely the right choice if:

• You are a controlling director of a profitable limited company with retained profits or ongoing income that can fund the contributions.
• You are in your 40s or 50s and have under-funded your pension — the Special Contribution approach may allow accelerated catch-up.
• You want access to a SSAS structure for commercial property or other self-directed investment.
• Your target pension level is high enough to justify the setup and ongoing administration costs.

It is less suitable if you are a new company with limited profits, if your business structure is likely to change significantly, or if the administration burden is not something you can manage alongside running a business.