Director / Executive Pension Plan (EPP)

Executive Pension Plans (EPP) are tax-efficient savings plans set up by the company for key employees. The employer (and sometimes the employee) pays into the plan, to build a tax-efficient fund, which is used at retirement to provide tax free cash and a pension income. In effect, EPPs are money purchase occupational pension schemes and operate for the most part like any other pension scheme.

EPPs are normally established by company directors or other valued employees for their own benefit, though, only the favoured can expect to be given the levels of investment that these schemes offer.

From an employer’s perspective, an EPP can form the core of a benefits package to attract, motivate and reward key executives. Additionally, there are financial benefits as contributions are allowable business expenses and can be set against taxable profits. Furthermore, there is no NIC liability and so extra pension contributions into an EPP can be made instead of salary increases.

The pension fund is set up under trust, with the trustees responsible for the trust’s day-to-day administration, such as ensuring contributions are paid regularly and benefits are paid out promptly.

For the individual, there is flexibility of retirement, allowing the person to retire early and hand over to others (although benefits can only be taken from age of 57) or to work well past the company’s normal retirement date.

!

THE VALUE OF PENSIONS AND THE INCOME THEY PRODUCE CAN FALL AS WELL AS RISE. YOU MAY GET BACK LESS THAN YOU INVESTED.

TAX TREATMENT VARIES ACCORDING TO INDIVIDUAL CIRCUMSTANCES AND IS SUBJECT TO CHANGE.

London Stock Exchange

Value Move %
FTSE 100
8093.54 53.16 0.661
FTSE 250
19695.72 -23.648 -0.12
FTSE 350
4444.16 24.45 0.553
FTSE All Shares
4397.79 23.73 0.543
Dow Jones
38460.92 -42.77 -0.111
Nasdaq
15712.749 16.109 0.103

Currencies

Value Move %
0
1.166 0.002 0.153
GBP/NOK
13.694 -0.002 -0.013
0
13.589 0.034 0.252
GBP/USD
1.251 0.004 0.353

Biggest Movers

Value Move %
SEGRO
795.6 +52.4 +7.05
easyJet
477.8 -18.1 -3.65

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