The Value of a Pension Plan for Professional Athletes

A guest blog from Metis Ireland Brand Ambassador, Jack O’Donoghue

As professional athletes, we dedicate our lives to our sport, pushing our bodies and minds to the limits day after day. While the thrill of competition and the love for our craft drives us, it’s important to remember that our careers have a relatively short life span. This makes securing our financial future even more crucial. One of the most vital components of a well-rounded financial plan for athletes is a pension.

Here are three reasons why having a pension is essential for athletes:

1. Tax relief on pension contributions: Athletes can benefit from tax relief on their pension contributions. Currently, professional athletes can contribute up to 30% of their net relevant earnings (to maximum earnings of 115,000) into a pension plan and claim tax relief on these contributions. This means that the contributions are considered as a tax-deductible expense, reducing the individual’s taxable income. Furthermore, professional athletes can also benefit from an early tax-free lump sum payment from age 50. This means up to 25% of the pension fund can be taken as a tax-free lump sum, subject to certain limits.
2. Mitigating Post-Retirement Challenges: Many athletes struggle with the transition from the highly structured and physically demanding world of professional sports to a more “normal” life. A pension can help ease this transition by relieving financial stress and allowing us to focus on personal growth, education, or starting a new business without feeling the pressure to immediately find another source of income.
3. Protecting Against Uncertainties: Injuries and unexpected setbacks are an unfortunate reality in professional sports. While we hope for the best, it is essential to be prepared for the worst. A pension plan offers a valuable safety net, ensuring that if our athletic careers are cut short due to unforeseen circumstances, we can still support ourselves and our families. Moreover, a pension is not just beneficial for the players themselves. It also sends a powerful message about the well-being and long-term care of athletes to future generations.

In conclusion, as athletes, we owe it to ourselves to prioritise our financial future. A pension provides us with peace of mind, stability, and a safety net for whatever life throws our way. Proactively demanding and advocating for robust financial planning, including pension plans not only benefits us but also sets a precedent for the entire sports industry to prioritise the long-term care and wellbeing of athletes.

Let’s embrace the importance of taking some time away from the sports arena to engage with professional financial planners and look after ourselves. This will create a sustainable and secure financial future for all athletes and provide peace of mind.

Jack O’Donoghue is a Munster Rugby player and has been a brand ambassador for Metis Ireland since 2020. We are proud of our association with Jack and look forward to supporting Jack and his Munster teammates throughout the rest of this season.