What pension rule changes do company directors face in April 2026?

For Irish company directors, pensions remain one of the most tax‑efficient ways to extract profits from a limited company. However, there are legislative changes happening in April 2026 called IORPS II. These changes under IORPS II along with tighter funding rules for PRSA pensions introduced in 2025, means company directors must consider their pension funding options more carefully.

Why April 2026 is a key deadline for company directors

By 22 April 2026, most traditional single‑member executive pension schemes must either:

• Become fully IORPS II compliant, which is rarely practical, or
• Transfer to a compliant structure, typically a PRSA or a Master Trust

Doing nothing is not an option.  You must decide between a PRSA or Master Trust in order to comply with these new IORPS II rules.

Your Main Pension Options from April 2026

In practice, company directors will be mostly choosing between two pension structures:

• A Master Trust
• A PRSA

Rather than defaulting into one option, it is worth understanding the differences.

1) Master Trust (Occupational Pension)

For many directors, a Master Trust replaces the old executive pension structure.

A Master Trust can:

• Allow your company to put more money into your pension
• Reduce trustee and governance responsibilities for you
• Retain more planning flexibility than a PRSA in many cases

This option is often suitable if you:

• Have retained company profits
• Are closer to retirement
• Need to fund pensions efficiently over a shorter time frame

2) PRSA (Personal Retirement Savings Account) 

From 2025 onward, employer PRSA contributions are capped at 100% of salary per year.

A PRSA may be suitable if:

• You are taking a “high salary” from your company
• You would like your pension money to pass to your spouse tax free in the event of your death
• Contributions are regular and predictable
• You want a simple, personal pension arrangement

However, PRSAs are usually less effective where:

• Salary is modest
• You want to extract large, one‑off profits from the company

Our Final Thought

Pensions remain a powerful and legitimate way for company directors to extract profits tax‑efficiently.

A structured review now can help you:

• Choose the right pension structure
• Reduce unnecessary tax
• Avoid rushed decisions that may restrict you in the future

Important Information

The value of pensions and ARFs can go down as well as up. Tax rules are subject to change and depend on individual circumstances. This content is for information purposes only and does not constitute financial advice.

Have a look at our webpage Executive Pension vs PRSA to learn about the key differences between each pension structure.