While it’s still unclear whether the new government will be a Fine Gael/ Labour coalition or if Fine Gael can make up a new government with the support of Independents, we know that Fine Gael will be the majority party in government. See below Fine Gael’s Pension Policy Summary from their election manifesto:
- A temporary, annual 0.5% contribution for all private pension funds, so that older beneficiaries of past tax relief make some contribution to deficit reduction. An equivalent reduction could be applied to public and private sector defined benefit entitlements.
- Abolition of PRSI relief on employer pension contributions.
- Allowing defined contribution pension savers to access funds early to meet their current business and personal responsibilities (and taxing the draw-downs).
- A cut in the standard fund threshold for pensions to €1.5 million for public and private sector workers, while also increasing the notional annuity cost of defined benefit, final salary schemes from the current 20:1.
- An increase in the “deemed distribution” rate on large (Annual Retirement Funds ARFs) to avoid their use for inheritance tax planning.
- The net objective of changes will be to cap taxpayer contributions to existing public and private sector schemes that deliver pensions of greater than €60,000 in retirement, while maintaining adequate incentives for younger, middle incomes families to continue to save for their retirement.
- There will, per usual, be transition arrangements for those approaching retirement.
- Put the tax treatment of employer contributions to Personal Retirement Savings Accounts (PRSAs) on an equal footing with employer contributions to occupational pension schemes.
- We will also fix the regulatory problems to allow private pension funds to invest more in Irish business.
- By cutting down on waste and inefficiency Fine Gael will keep the Old Age Contributory and Non-Contributory pension at its current level.
