March Market Update 2023

Share This Post

In this month’s issue we discuss with Patrick Good from Quilter Cheviot’s outlook on the opportunity for Personal Retirement Savings Account (PRSA) funding in 2023

Personal Retirement Savings Account (PRSA)regime offers business owners greater flexibility

From time to time, opportunities appear that generate genuine excitement for clients. In the world of pensions, this is usually a very rare occurrence but such is the opportunity for Personal Retirement Savings Account (PRSA) funding in 2023.

A rocky start

In the middle and latter part of 2022 there was little reason for cheer in the pension space. New EU regulations were being enforced in full, resulting in the cessation of single-member pensions schemes, commonly known as ‘executive pensions’.

This effectively locked business owners out of the pensions market – bad news for just about everyone. History has shown that entrepreneurs tend to focus their time, energy and resources on building successful businesses. Rarely do they take hard-earned funds and invest in their own pensions, particularly during the growth phase. There are simply far more pressing requirements for that capital.

When the business is successful, however, minds tend to turn to personal affairs. Until last summer, a business owner could open an executive pension and ‘back-fund’ this quite generously – a reward for contributing to the economy through employment and society in general via taxes for many years. With the regulatory changes, this window closed, and entrepreneurs were left with limited options.

What a difference 6 months make

The Pensions Authority instructed the industry to focus on PRSAs as a means of replacing executive pensions. However, PRSAs had very restrictive contribution rules, which provided little scope for the entrepreneurs to back fund their pensions. Employer-related PRSA contributions were recorded as benefit-in-kind (BIK) and formed part of an employee’s age-related contribution limits – capping the total contribution at 40% of EUR115,000 for anyone over 60 years of age, but only 20% for anyone aged 30 to 39, for example.

Significant lobbying from the pension and broker industry to amend the employer contributions rule proved successful. In the Finance Bill, the government announced that the BIK charge levied on employer PRSA contributions would be removed and employer contributions would, therefore, no longer be included under the personal funding cap.

The removal of this onerous limitation moved PRSAs from last place to first for business owners looking to contribute a lump sum to a pension.

Solution & opportunity

Under the previous executive pension regime, funding rules for employer contributions were generous but they also had their limits. The contributions received relief from a corporation tax perspective but, depending on type and size, there was a risk that this had to be spread over several years.

As of the 1st of January, for a PRSA, whether by design or by accident, the ‘executive pension’ rules have not been replicated and do not apply to PRSAs. This provides an even more generous funding opportunity than previously available – individuals who were behind from a pension funding perspective now have a significant opportunity to fix this in one fell swoop. Additionally, the employer contribution would be tax deductible in the year it is made, rather than spread over several years.

This flexible level of funding is an opportunity to extract wealth in a very tax-efficient manner from a company while providing for the owner’s, employee’s or director’s retirement requirements.

There is a similar opportunity for sole traders that employ individuals in their business but have not incorporated.

Final word

At certain points, opportunities come around for those who have kept their powder dry. In the next Finance Bill, the government may announce legislation to reintroduce a limit on employer contributions to Personal Retirement Savings Accounts(PRSA), so this opportunity may only exist for 2023.

If you have any queries about this PRSA opportunity, please do not hesitate to contact a member of our advisory team at,, & or alternatively, you can call the office directly on 01 4972544. We would be happy to take you through the details and assist in evaluating your options.

This article does not constitute tax or legal advice.

Hegarty Financial Management 40 years caring for our clients financial wellbeing.


Recent Mortgage Reviews

Delighted to keep up our 5 star google review with our most recent mortgage google reviews from happy mortgage clients.

Catherine Falkner

a week ago NEW

We cannot recommend Ross and the team at Hegarty highly enough. They managed the whole process from start to finish and advised us on everything. Ross is very knowledgeable on the various products and we really trusted him to guide us in the right direction. The team are so friendly and really genuinely care about the people they are working with. We are so glad we went with Hegarty again and would definitely recommend them to a friend.

Agnieszka Mendrychowska

2 weeks ago NEW

I had a pleasure doing business with Hegarty’s twice so far (helping me with the mortgage application first time and re-mortgaging the house the second time) and each time Ross and his team were 100% professional, always very helpful and very easy to communicate with. I couldn’t recommend Hegarty’s more! I will definitely get back to Ross in the future if the opportunity arises.

Hegarty Financial Management 40 years caring for our client’s financial wellbeing.
The highest compliment you can pay us is the introduction of new clients. If you know someone who would benefit from our service, we would very much appreciate your recommendation.

More To Explore

July Market Update

  In this month’s issue we discuss the essential requirements needed to apply for a mortgage Our award winning mortgage team have guided both new

June Market Update

  Life Insurance You can’t predict the future but you can plan for it. Life can be unpredictable, but with the right life insurance cover

Please do not hesitate to contact us should you wish to discuss the above requirements in more detail or for further information.
We can be contacted by phone at (01) 4972544 or email