• EPPs are occupational money purchase pensions commonly used for directors and senior employees. They are more complex than Personal Pension Plans (PPPs) and so require more detailed research before setting up and more careful reviews once in place.
    Due to who they are set-up for, EPPs are only used by organisations, not individuals. They can be seen as another perk of the job for senior management, and also very worthwhile for a company or partnership.

Executive Pension Plans (EPPS)

The main attraction of EPPs over more conventional pensions is their ability to invest in wider areas of finance, i.e. shares and commercial property. These plans also have loanback facilities, whereby the company can borrow money against the pension, should an important purchase be required or for when times are tough.

Under previous rules, one of their biggest attractions was that employers could pay in very large amounts indeed for senior executives. This would then allow the fund to be big enough to be used to purchase commercial property, most likely for that same company.

Contributions today for EPPs are the exact same as they are for personal pensions. £3,600 can be paid per annum with basic rate tax relief with no earnings. Thereafter, the maximum which can be paid per annum is the lower of £50,000 or 100% of earnings.

The rules for EPPs changed in April 2006 and it can be very complicated to figure out what set of rules any particular scheme must adhere to. This is where the use of an independent financial adviser like MAP is very important, to sort out what rules apply to a scheme and to monitor it regularly, or indeed to set one up properly from the beginning.

So whether you have an existing EPP in place and would like it reviewed, or are thinking of having a new one set-up, contact MAP today for expert advice.