PRSA vs Master Trust: Key Differences for Company Directors 

For business owners and company directors, the choice between a PRSA and a company pension (typically a Master Trust) is no longer straightforward. Since the introduction of IORP II, it has become a core strategic decision in retirement planning. 

At a high level, a PRSA is a personal pension contract between you and a provider. A Master Trust, by contrast, is an occupational pension set up by an employer and managed by professional trustees. 

Where They Differ: 

• Structure and Control 
  A PRSA is owned by the individual and remains fully portable. 
  A Master Trust is linked to employment, with governance and compliance handled by trustees. 

• Funding Flexibility 
  From 2025, employer contributions to both structures are capped at 100% of salary per year. 
  However, Master Trusts can facilitate backdated funding based on salary and service, which can significantly increase the total amount invested for retirement. 

• Retirement Outcomes 
  Because benefits in a Master Trust are based on salary and service, they can support larger tax-free lump sums compared to a PRSA in many cases. 

• Governance 
  PRSAs involve minimal oversight from the employer. 
  Master Trusts remove the administrative burden entirely, with trustees responsible for regulatory compliance, investment oversight and reporting under IORP II. 

• Death Benefits 
  Occupational schemes structure death benefits differently, often allowing for more tailored outcomes within a Master Trust environment. 

 Accumulation vs Decumulation: 

In practice, many directors are now using Master Trusts for accumulation and PRSAs for decumulation. A Master Trust can be an effective vehicle for building pension wealth, particularly where backdated funding and higher contribution potential are available. However, at retirement, the flexibility of a PRSA often becomes significantly more valuable. 

By transferring to a PRSA, directors can implement a phased drawdown strategy, taking benefits gradually while leaving the remaining fund invested. This avoids the rigidity of full crystallisation and supports more controlled, tax-efficient income planning over time. For those who don’t need immediate access to their full pension, a PRSA provides the flexibility to manage both withdrawals and investment exposure in a way that is simply not available within most occupational structures. 

Why This Matters: 

The April 2026 IORP II deadline forced many directors to revisit their pension structure. In practice, this has meant making a decision between staying with a PRSA or moving to a Master Trust—often without fully understanding the long-term implications. 

The Real Consideration: 

This isn’t simply a product choice. It’s a question of structure. 

• A PRSA offers simplicity, flexibility and control at retirement 

• A Master Trust offers greater funding capacity and potentially enhanced retirement benefits during the accumulation phase, particularly for established business owners 

Getting this decision right—and sequencing the two structures appropriately—can have a material impact on long-term outcomes. 

Next Steps:  

If you’re considering how best to structure your pension—whether that’s retaining a PRSA, moving to a Master Trust, or using both strategically—it’s worth taking advice before making a decision. The differences are not just technical; they can materially affect your long-term outcomes. To discuss your options in more detail, you can contact Jim Stapleton of Eolas Money, who specialises in advising company directors and business owners on pension strategies, by clicking HERE