Establishing a personal, bespoke benefits plan or a defined ORSO registered scheme for an employee.
Employers make annual contributions to the scheme. These are tax deductible to the employer if they are 15% or less of the employee's total salary.
Employers make special contribution for employees' past services. In the case of a defined benefits plan, employers contribute to an underfunded scheme. These contributions are deductible over five years.
Trustee of scheme invests contributions in accordance with employees' directive.
The employee should not seek to withdraw the scheme funds before retirement and/or the termination of his/her services.
Potential tax advantages:
Contributions are tax deductible for both employers and employees.
Income/gains earned through the scheme is never eligible for taxation.
The tax risk should in most cases be low, even with full disclosure to IRD.
Income gained is not subject to overseas taxes, which can be a benefit to anyone retiring overseas.
Gained income which remains after the passing of an employee is not subject to Estate Duty.
PwC can provide services including:
Financial modelling to illustrate both the corporate and individual tax implications under various scenarios.
Provision of tailored tax advice.
Review and amend the existing employment contracts when necessary.
Advising in the determination of the level of annual and special contributions.
Advising in the determination of the vesting, investment, and other pension plan rules.
Introducing and liaising with other service providers who might be required, e.g. trustees, fund managers, actuaries, and/or lawyers.