Pension OverFund

Sparky78

My Father has a Director's Retirement Portfolio(Pension) with Davy stockbrokers.
His Portfolio manager rang him last week to tell him he was overfunded by 50000 and wants his to send a p60 for last year with an increased income.
My father's accountant believes that if he increase his income for the last 3 years before he retires that this should cover any overfunding.

Will this solve the problem?

Thanks

broker2008

The revenue define Final Remuneration. generally it is based on an employee’s final basic salary plus a 3 years average of their fluctuating emoluments (e.g. bonus or overtime). There are other aspects to look at, is he married, has a spouses pension been included etc. Very unusual to have a portfolio manager notice overfunding I would think.

PS - he might be no longer overfunded following the ups and downs in the market.:o

Nermal

What happens if you overfund? Does the government take it, or is it refunded to you or what?

broker2008

It depends on whether the overfunding was deliberate or not ! The funds could be used by the Trustees to help defray costs or even to provide benefits for other scheme's employees at the Revenue's instruction or excess funds could be refunded and treated by the company as a trading receipt or the overfunding could be refunded to the member via payroll but subject to both income tax and PRSI). Professional advice should be sought if in doubt.