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GAZETTE
DECEMBER 1991
The Law Society Retirement Annuity Pension Plan
Now is the Time to Get in
We are again approaching that time
in the financial year when those
who are self employed are looking
for some tax breaks to alleviate the
tax liability before the end of the
income tax year. With all of the
recent government talk of increas-
ing the tax net and withdrawing or
reducing allowances and reliefs,
still one of the most attractive tax
breaks available is the area of
pension contributions. All contri-
butions are fully deductible against
income tax at your top rate subject
to an overall limit of 15% of net
relevant earnings. While this article
does not allow the space to go into
the detailed tax complications of
pension contributions, I would like
to bring to your attention one of the
most attractive and beneficial plans
available at present, namely the
Law Society Retirement Annuity
Plan. This plan offers all the tax
benefits mentioned above and
much more.
Retirement Annuity Plan
The Incorporated Law Society
established a Retirement Annuity
Plan in 1975 to provide its members
who are self employed or in non
pensionable employment wi th the
opportunity to provide for their
retirement during their working life.
There is still a very small per-
centage of qualified solicitors who
are actually members of this
scheme but the number are
increasing annually.
The significant advantages of this
scheme over all other available
schemes have to be highlighted.
Main Advantages
The main advantages of the
scheme will be felt in the early
years as a direct result of the very
low entry costs. The entry and
ongoing cost of the Retirement
Annuity Plan are lower than those
of any other life assurance scheme
available at present. The initial
entry charge is only 2.5% of each
sum invested and the ongoing
by
Harry Cassidy,
Associate
Director,
Investment Department, The
Investment Bank of Ireland
Limited.
management fee is only 0.5% per
annum.
Performance
Although I cannot guarantee the
rate of return of the plan, our
objective as fund manager is to
achieve a real rate of return
substantially in excess of inflation.
The returns for the past six years
and the year to date are set out in
the Table.
Normally, most insurance schemes
carry an entry charge of at least
5% with annual management fees
ranging from 0.75 to 1%. This has
a negative effect on the investment
level and performance.
The Law Society Retirement Plan
has the following benefits:
• Low entry costs.
• Low management fee.
• No initial units.
• No charge for sw i t c h i ng
between funds.
• No penalty charges for ceasing
contributions.
In making contributions to the plan,
you are not tied to making payment
every year. Indeed, the minimum
contribution that can be made in
any year is only £500.
Choice of Funds
The Plan is invested in two funds.
A solicitor can choose to invest in
the managed fund which is a broad
spread of equities, gilts and cash or
the cash fund which is suitable for
those years immediately prior to
r e t i r ement t hus a l l ow i ng an
individual to protect accumulated
gains.
As you will see from these figures,
the Law Soc i e ty Plan has
pe r f o rmed
very
f avou r ab ly
alongside the main insurance
companies and remember all gains
made w i t h in t he f und are
completely tax free.
Time to Invest
This is normally the time when you
will be considering making pay-
ments or increasing contributions
to an existing plan. Contributions
for tax purposes can be made up
to the 31st January, 1992 and if
you are cons i de r i ng mak i ng
payments, why not consider the
Law Society Plan for your next
contribution.
If you require any further details
on the plan and wish to investigate
the many benefits in great detail,
please contact either myself or
Terence Deacon
at The Investment
Bank of Ireland Limited, 26
F i t zw i l l i am Place, Dublin 2.
Telephone 616433.
•
Year to
1/10/91
9 0
89
88
87
8 6
85
Irish Law Society
Pension Fund
17 . 98
(9.4) 19 .2 26 .9 7 . 4 2 0 . 8 28 .1
Irish Life
Managed Fund
14 . 22
(11.2) 19 .8 26 .1 10 .9 22 . 1 2 4 . 9
Standard Life
Manged Fund
17 . 42
(14.8) 16 .4 2 9 . 0 14.1 2 0 . 8 3 1 . 2
4 13