Advertisement

Readers like you keep news free for everyone.

More than 5,000 readers have already pitched in to keep free access to The Journal.

For the price of one cup of coffee each week you can help keep paywalls away.

Support us today
Not now
Thursday 2 February 2023 Dublin: 10°C
Joachim Wendler via Shutterstock
# Pensions
Top execs pension contributions 36 times more than other staff
ESRI research shows companies contribute an average of €100,000 for top executives compared to just €2,700 for other employees.

THE AVERAGE ANNUAL employer pension contribution  for executive directors in the private sector is nearly 36 times more than for other employees according to an ESRI research paper.

The research based on annual accounts for 2009 on pension arrangements for 147 executive directors for 48 companies showed contributions for the top executives was €100,000 on average compared to €2,700 for other employees.

The average employer pension contribution rate for executive directors was almost 26 per cent of salary whereas for other private-sector employees it was about 7 per cent.

If executive directors had to retire in 2009 they would have been entitled to a pension of €199,100, or 17 times more than the annual State pension of €11,976 on which most pensioners depend, the research said.

In 2009, the costs of State tax reliefs for private pension arrangements amounted to €2.7 million and they were concentrated on executive directors and other high income earners who have higher marginal rates of tax and larger pension contributions.

Author of the paper Gerry Hughes, visiting professor at Trinity College Dublin, said the playing field could be levelled by taking into account the National Pension Policy Initaitve recommendation that the combined value of the State pension and private pension should replace 50 per cent of gross pre-retirement earnings.

“This could be done by reducing the present earnings contribution limit from €115,000 to €75,000 and the cap on the size of individual pension funds from €2.3 million to around €0.6 million”, he said.

Read: Half of Údarás na Gaeltachta budget spent on former employees’ pensions>
Irish life CEO remuneration breaches government’s pay cap – Doherty>

Your Voice
Readers Comments
15