Thursday, December 19, 2013
Wishing you a Merry Christmas and a Happy New Year from ITC
The ITC team would like to take this opportunity to wish all our readers a very Merry Christmas and a Happy New Year. Our office will be closed from Tuesday December 24th 2013 to Wednesday January 1st 2014. We will reopen on Thursday 2nd January 2014.
We will be back in 2014 with more from Ireland's first truly independent pensions blog!
www.independent-trustee.com
Tuesday, December 17, 2013
Dail Drawdown
Yield from the taxation of the annual
imputed distribution of ARF assets 2007 – 2012
Year
|
Yield (€ million)
|
2007 (earliest available)
|
2.75
|
2008
|
6.5
|
2009
|
7.9
|
2010
|
10.3
|
2011
|
11.6
|
2012
|
11.5
|
Tuesday, November 26, 2013
Aidan McLoughlin on RTE Radio 1
Aidan McLoughlin speaks to Sean O'Rourke on RTE Radio 1 about how the Government has signed off on new rules that could see cuts in pensions for retired members of defined benefit schemes. Listen to the full podcast here.
www.independent-trustee.com
Thursday, November 21, 2013
Reprioritisation of Benefits: the real winner is…?
5 years into the financial crisis that destroyed the Balance
Sheet of almost all DB schemes (and 18
months after a comprehensive solution backed by IBEC, ICTU and certain pension
bodies was presented to the Minister) action has finally been taken to
restructure the Priority Order.
Why that is necessary can be illustrated by looking at a
scheme with 2 members (1 pensioner, 1 active), an insolvent employer and a fund
value of €500,000:
A. Before Financial Crisis
Value of Pensioner liability €350k
Value of Active liability €150k
Funding for Actives 100%
B. After Financial Crisis
Value of Pensioner liability €500k
Value of Active liability €150k
Funding for Actives 0%
The deterioration was primarily caused by the decline in
bond yields in Germany which meant annuities became more expensive and
therefore more of the fund was allocated to pay pensioner benefits.
The new rules now mean (in scenario b above) that where both
the employer and pension scheme is insolvent (Double Insolvency) the balance
will be rejigged as follows:
C. After Minister’s announcement
Value attributable to Pensioner €425k
Value attributable to Active €75k
Shortfall €125k
Earlier this year the European Court of Justice ruled that
the Irish State had failed to provide adequate protection to members of such
schemes. The net effect of this was that, under scenario b above, the State was
facing a liability of at least €75k. This liability will now be Nil – the
pensioner is picking up the tab.
Note that in the recent budget the Minister for Finance also
raised an additional levy on pension funds to pay for this liability –money he
can now use for other purposes.
The real winner is the Government!
Tuesday, November 19, 2013
Important Pension Change - Act Now
Budget
2014 reduced the standard fund threshold (SFT) from €2.3m to €2m.
This
means that, when an individual accesses their pension benefits, if the value of all pensions
held by that individual exceeds €2m, the excess will be subject to an effective rate of tax of
up to 70%!
While
a fund of €2m may seem quite large, it in fact equates to an annual income in
retirement of around €50,000 so it may affect more pension savers than you
would initially imagine.
In a
recent survey conducted by Independent Trustee Company, 75% of the advisors
polled said that securing the €2.3m PFT
for their clients was of high importance.
There is a window of opportunity available, but you must act quickly.
Where
an individual has existing benefits in excess of €2m at 1st January
2014, Revenue will allow them to apply for a personal fund threshold (PFT) and
that threshold will apply to them instead of the SFT. The maximum PFT available is €2.3m. Depending on your clients’ circumstances, it
may therefore make sense for them to contribute to their scheme before the end
of the year in order to secure a PFT for the full value of their benefits. Contributions made after 1st
January 2014 cannot be included in the calculation of the PFT.
The key is to act now, before the 31st
December, while the opportunity for your clients is still available.
For
further information, please contact one of our consultants in ITC Consulting:
Barry
Kennelly on (01) 6148068 or at barry.kennelly@independent-trustee.com
Jennie
Faughnan on (01) 6035140 or at jennie.faughnan@independent-trustee.com
Friday, November 15, 2013
2013 Business & Finance FS50 Awards - Aidan McLoughlin
We are delighted to announce that Aidan was chosen by Business & Finance magazine as one of the most influential business leaders in financial services in Ireland.
Aidan was joined at the Merrion Hotel on Wednesday night
with other industry leaders that are playing a vital role in financial
services. Padraig O'hUiginn, Former Secretary General Department of the
Taoiseach 1982-1993 was also honoured during the evening for his outstanding
contribution to financial services.
Monday, November 11, 2013
Finance Act 2013 - The Bill, Part 2
Following the budget in early October, the Government have wasted no time in introducing Finance Bill 2013 (2) which, among other things, makes provision for how Noonan’s pension amendments are to take effect. Paul Gilmer sets out some of the key points from the first draft of the bill:
1. New Standard Fund Threshold (SFT)
As expected, the SFT has been reduced, but by a lot less than most expected. Finance Bill 2013 (2) reduces the €2.3 million cap down to €2 million with effect from 1 January 2014. However, as on previous occasions, an individual who has pension rights in excess of this new lower SFT limit on 1 January 2014 may claim a Personal Fund Threshold from the Revenue Commissioners (see note 2).
The new lump sum rules are:
1. Maximum tax relieved lump sum at 25% of €2,000,000 = €500,000
2. The first €200,000 tax free.
3. €300,000 taxed at 20%
Individuals with the capacity to fund to the €2.3 million mark should act before the 31 December 2013.
2. New .15 Levy
Minister for Finance Michael Noonan has followed through on the Government’s commitment to end the pension levy of 0.6 per cent a year but disappointingly didn’t waste any time in introducing a new levy of .15 per cent for the years 2014 and 2015. Unfortunately, it seems that the levy is going to be a feature on the pension landscape for the foreseeable future.
3. Revenue are introducing e-filing for the new round of Personal Fund Thresholds (PFTs):
In order to make a PFT notification to Revenue, an individual will be required to obtain from the administrator of each pension arrangement of which he or she is a member, a statement certifying, among other things, the amount of the individual’s pension rights on 1 January 2014 relating to that arrangement. A PFT notification will have to be made electronically on a system being developed by Revenue and the time period for notification will be 12 months after the date on which the electronic system is made available.
A PFT notification made by electronic means shall be deemed to include a declaration to the effect that the notification is correct and complete.
Revenue will also accept a PFT application in the normal way for those retiring before the electronic system in place.
4. Another benefit to the public sector high earners:
The reimbursement options, introduced in Finance Act 2012, for public servants affected by chargeable excess tax (who, unlike affected individuals in the private sector, cannot generally minimise or prevent the breaching of the SFT or PFT by ceasing contributions and benefit accruals) are being amended and extended. This will reduce the amount that can be recovered upfront from the net retirement lump sum payable to the individual to a maximum of 20 per cent (from 50 per cent) and to include the option of reimbursement of the pension fund administrator solely by way of a reduction in the gross pension payable over a period not exceeding 20 years.
5. There is more detail on the new rules for valuing pension benefits:
The valuation factor to be used for establishing the capital value of an individual’s defined benefit (DB) pension rights at the point of retirement, where this takes place after 1 January 2014, is being changed from the current standard valuation factor of 20 to a higher age–related valuation factor that will vary with the individual’s age at the point at which the pension rights are drawn down. The age–related valuation factors range from 37 for DB pension rights drawn down at age 50 or under, to a factor of 22 where they are drawn down at age 70 or over. The valuation will also distinguish between benefits accrued before 1 January 2014 (still valued at 20 times) to those accruing after 1 January 2014 (valued based on the age related factors).
6. Clarification of the early access to AVCs
The bill provides clarity for members of occupational pension schemes/PRSAs regarding the option to withdraw up to 30 per cent of the accumulated value of additional voluntary contributions. The bill is amended to address concerns that the existing override provisions in the section may not give scheme trustees and PRSA administrators sufficient scope to allow such withdrawals where the trust deed and scheme rules or the PRSA contract terms prohibit them. The amendment specifically provides that the option may be exercised by an individual, notwithstanding the rules of the retirement benefits scheme or the terms of the PRSA contract concerned. This will obviate the need for scheme rules or contract terms to be changed to facilitate the withdrawal option. The change applies to options exercised on or after 27 March 2013, the date Finance Act 2013 became law.
Of course, we are all hoping this is the end to what has become an annual event whereby amendments are made to the Irish Pension Regime. However, lessons from the levy show we should not be too optimistic.
Director
Wednesday, October 30, 2013
Dail Drawdown
Minister Noonan went on to say “I considered that I was in a position to make these
significant commitments on foot, among other things, of proposals in late 2012
from the pensions sector for changes to the Standard Fund Threshold (SFT)
regime, as an alternative to standard rating of pension tax relief, which it
was claimed would yield savings and tax revenues in the region of €400 million.
Pending further analysis of this claim, I included a much lower figure of €250
million in the Budget 2013 arithmetic. That analysis has since revealed
significant downside risks to the achievement of even this lower level of yield
or savings. The estimate of the yield from the changes to the SFT regime which
I announced in last week’s Budget is €120 million. These changes differ in some
respects from those proposed by the pensions sector and reflect, on legal advice,
the requirement to protect pension rights at the date of change. In addition,
valuation factors to place a value on Defined Benefit pensions for SFT purposes
will vary with the age at which the pensions are drawn down thereby improving
equity within the regime.
I would not categorise my engagement with the pensions sector on
this matter as a “deal”, in the manner suggested by the Deputy. However, the
assessment that the changes to the SFT regime required to deliver on the Budget
2013 commitment to cap taxpayer subsidies to higher value pensions would have a
considerably lower yield than originally put forward, meant that the
achievement of the overall budgetary objectives (including the continuation of
the reduced VAT rate for the tourism sector and to make provision for potential
State liabilities which may emerge from pre-existing or future pension fund
difficulties) necessitated the imposition of the additional 0.15% pension fund
levy for 2014 and 2015.”
Friday, October 25, 2013
ITC win at the YIBA Awards!
The Young IBA awards took place yesterday in The Round Room, Mansion House as part of the 2013 Annual IBA Lunch. We are delighted to announce that Colin O'Neill of ITC took home the prestigious Judges Choice Award.
Colin joined Independent Trustee Company in 2008 and holds the position of assistant client services manager. He is responsible for the administration of our products and services for a portfolio of clients. This involves daily interaction with our clients and their advisors. He obtained a Bachelor of Science in Finance from University College of Cork in 2006. Colin went on to become a Qualified Financial Advisor in 2009. Most recently, Colin qualified as a Chartered Institute of Management Accountant (CIMA) in August 2013 where he came 4th in Ireland in his final paper.
The management and staff in ITC would like to take this opportunity to congratulate Colin on his award and are delighted that his hard work has been acknowledged by the Young IBA.
Colin O'Neill is pictured below with Des Cahill and Aidan McLoughlin, Managing Director of ITC Group.
Thursday, October 17, 2013
Goal Jersey Day in ITC
On Friday the 11th of October 2013, the Independent Trustee
Company Office was particularly colourful as the staff of ITC donned their
favourite sports jerseys and contributed in support of a great cause; GOAL Jersey Day.
GOAL is an Irish humanitarian aid organisation that are currently working
in 13 countries in the developing world and over the past 36 years GOAL has
spent in excess of €790 million in over 50 countries. GOAL’s Jersey Day takes place in hundreds of
schools, businesses and organisations every year. This year’s Jersey Day took place in more than
1000 locations around Ireland in order to raise vital funds for GOAL’s work
across the developing world. All
proceeds generated will be used by GOAL to support some of its most urgent
operations across 13 countries, including Syria, where the organisation is
implementing its largest ever humanitarian response programme.
For more information on GOAL’s life-saving work please visit their
website at the following link: www.goal.ie.
Wednesday, October 16, 2013
ITC Budget 2014 Webinar Recording
If you missed this mornings ITC Budget 2014 Briefing webinar in association with the Irish Brokers Association you can view the webinar recording here.
We hope that you find the presentation useful in your planning for 2014. If you have any questions in relation to the content discussed please e-mail JustAsk@independent-trustee.com.
www.independent-trustee.com
Thursday, October 10, 2013
Independent Trustee Company Budget 2014 Briefing Webinar, in Conjunction with the IBA
ITC, in conjunction with the Irish Brokers Association are hosting a briefing of the 2014 budget. The briefing will be held via live webinar. Aidan McLoughlin, Group Managing Director of Independent Trustee Company will focus on pension changes and members of the ITC Consulting team will cover capital taxes and retirement planning.
Due to the popularity of our upcoming Budget 2014 Briefing, Independent Trustee Company and the Irish Brokers Association have decided to schedule a second webinar. We hope that you can join us for our second session as the first one is currently full.
DATE: Wednesday, 16th October 2013
TIME: 10.00am - 11.30am
LOCATION: Online
TIME: 10.00am - 11.30am
LOCATION: Online
CPD certificates will be circulated after the webinar.
Click here to register, places are limited so make sure that you book yours soon! If you have any queries please e-mail JustAsk@independent-trustee.com. The webinar will also be available as a recording after the event.
Click here to register, places are limited so make sure that you book yours soon! If you have any queries please e-mail JustAsk@independent-trustee.com. The webinar will also be available as a recording after the event.
Thursday, October 3, 2013
Don't let the CAT relief out of the bag
There is, unfortunately, speculation that the
forthcoming Budget will introduce yet another round of increases in the rates
of capital taxes. Not content with a 65%
increase in rates from 20% to 33% since 2008, there is a fear that there will
be both a further increase in the rates of Capital Acquisitions Tax (CAT) and Capital
Gains Tax (CGT), a further reduction in the thresholds and the restriction of
the remaining reliefs.
The CAT Rate
For a number of years up to 2008, CAT was charged at
20%. In the last Budget it was increased
to 33% from 30%. Will it rise
again? Some commentators fear it will,
particularly as the rate is still lower than UK inheritance tax at 40% and the
rates in other EU jurisdictions.
The
CAT Thresholds
To many, a more important factor than the actual rates
is the threshold at which CAT starts to bite.
In 2008 the parent-child Group A threshold was around €520,000 and the
CAT rate was 20%. Now the Group A threshold
is €225,000.
So, not only is the rate higher, but it kicks in much
earlier and so many more people are caught within its net. Take the example of a child inheriting
€600,000 in 2008 – the tax charge would have been around €16,000. Now, the tax take would be about €123,000!
It could unfortunately get worse.
The
CGT Rate
As with CAT, up to 2008, for a number of years, the
principal CGT rate was 20% and now it is up to 33%. Will it rise again?
Although it is currently not a huge concern for the
majority of people, there is recognition that excessively high CGT rates could prove
a disincentive to people to sell assets. There is, therefore, a possibility
that the rates of CAT and CGT may differ in the future.
There is also a possibility that there could be tiered
rates of CGT (and indeed CAT), e.g. CGT rates could be linked to different
periods of ownership or level of gains. There
could, for example, also be a new lower CGT rate on the sale of business assets,
which would be something to be welcomed. The National Recovery Plan of 2010
suggested some of these changes.
The Reliefs
A
further possible change is the restriction of the current CAT and CGT
reliefs. The Commission on Taxation in 2010
suggested restrictions on the reliefs available on transfers of family
businesses. These have only been partially introduced, so perhaps they will be
implemented more fully, which would further penalise the transfer of businesses
to family members. The National Recovery
Plan also suggested a restriction of capital tax reliefs. There is, therefore,
a distinct possibility that further changes could be on the way.
If there is any chance that you or any of your clients
are in the process of transferring a business or business asset in the near
future, it would be worth doing so before the Budget. For more information contact Barry Kennelly on barry.kennelly@independent-trustee.com.
Director, ITC Consulting
Tuesday, September 24, 2013
A Question of Income
“The question isn’t at what age I
want to retire, it’s at what income”.
-
George Foreman
While we await the fall-out from the increase in the
State Pension Age to 66, due to take effect on 1st January 2014, and
the unknown changes to the pension regime, anticipated in Budget 2014, George
Foreman’s declaration gains particular relevance for Irish pension savers.
What measures affecting pensions are we likely to see
in October’s Budget?
Last year the Minister announced that the Government
would introduce measures to ensure that tax relief on pension contributions would
only serve to support pensions that deliver an annual income of up to €60,000. This aim is likely to be achieved by reducing the
maximum allowable pension fund (the standard fund threshold - “SFT”). The
threshold will potentially be reduced to anywhere between €1.2m and €2m.
If the current system of valuation is maintained,
i.e. by using a multiple of 20, then a reduced SFT of €1.2m could be
introduced. That would affect all those
with defined contribution arrangements as it is not realistic to expect €1.2m
to produce an annual income level of €60,000. Some in the industry, therefore, are lobbying
for a more realistic multiple of 30 times to give an SFT of €1.8m. Of course, an increase in the multiple, while
favouring defined contribution pension schemes, could see a higher number of
defined benefit pension entitlements affected by the threshold.
A further consequence of the reduction in the
threshold, and this is likely to be more important to the majority of pension
savers, will be a reduction in the retirement lump sum. Currently up to €200,000 of a pensioner’s
retirement lump sum may be taken tax-free and further lump sum entitlements up
to €375,000 may be claimed at 20% tax. A
reduction in the SFT could also lead to a corresponding reduction in the amount
of the lump sum available at the 20% tax rate.
If this also leads to a
corresponding reduction in the €200,000 tax-free lump sum, a large number of
pension savers could be affected.
Realising that we possibly can’t change much about
the upcoming Budget, we could adopt a defeatist attitude. Foreman took a
different approach to his retirement and famously invented a grill.
Similarly, pension savers facing the unknown may also
take precautions. So, if you are close to
or have passed your retirement age, you may consider whether to draw down your pension
now. It can continue to grow tax free in
an Approved Retirement Fund, but you could avoid the possible reduction in the
lump sum benefits. If you decide that
you are too young to retire you can later change your mind and fund a new
scheme.
If you are close to the standard fund threshold or in
the fortunate position of having made investments which will bring you above it
before your retirement, you may similarly consider the retirement option or
avail of the temporary measure to draw down 30% of your AVCs – in order to
avoid the punitive tax.
If on the other hand you have no intention of hanging
up the gloves or are far off any of the thresholds, the best advice is to avail
of the tax benefits of the current regime to the greatest possible extent. Tax relief on pension contributions continues
to be beat all other reliefs in the tax code. The best precautionary measure against the
unknown is to make your pension contributions now!
Tuesday, September 17, 2013
Top 3 ITC Blog Posts in 2013
The ITC blog, Independent Talk, is a form of communication which we
use to ensure that you are kept up to date on any recent legislation changes,
industry news and ITC updates. This is also a great platform to discuss and
debate industry issues, provide technical assistance and to generate ideas. A blog is not just for bloggers…. Subscribe to Independent Talk, the ITC blog, and keep up to date on Industry news, Tax & Legislative
changes and don’t be left in the dark!
For those of you who are not subscribed to the ITC
blog or any blogs, you have being missing out! With over 200+ subscribers and
almost 24,000 views, the ITC blog has been a successful journey to date. To follow are the 3 most popular blog post
topics on Independent Talk in 2013:
3. Ignoring the Elephant in the
room
The Social welfare and Pensions (Miscellaneous
Provisions) Bill 2013 was announced by the Minister for Social Protection, Joan
Burton TD on 22nd May 2013. The main pension
provisions of the Bill are discussed in this post, which was the third most
read post on the Independent Talk blog.
Click here
to read the full article.
2. Fianna Fail pension strategy
launch
The Fianna Fail pension strategy, launched in April
2013 by Willie O’Dea, deals with several issues close to our heart:
·
The funding requirements for DB schemes
·
The priority order for DB schemes on wind up
·
Early Access to Pensions and
·
The issue of Pension Charges
Click here
to read the full article.
1. Public sector pension changes
The Public Service Pensions (Single Scheme and
Other Provisions) Act 2012 was enacted in July 2012. It will facilitate the
introduction of a new Single Pension Scheme for all new entrants to the public
service. This includes the civil
service, education sector, health sector, local authorities, Gardai, Defence
Forces, regulatory sector and non-commercial semi state bodies. It also
includes Oireachtas members and the Judiciary.
The new features of the scheme are discussed in this blog post. Click here
to read the full article.
What do you want to see more of?
As part of the recent Advisor survey, the areas of
interest for future blogs are primarily in tax changes, legislative changes,
reasons for Self- Administration and industry news and development.
These subjects and all relevant industry updates
will be covered on upcoming blogs. If you have any further areas of interest
which you wish to see discussed, please feel free to contact us on
justask@independent-trustee.com.
How to Subscribe to the ITC Blog
To subscribe to the ITC Blog visit Independent Talk and enter your
email in the box provided on the right hand side of the page.
Thursday, September 12, 2013
The Good, the Bad and the Ugly – the revised Revenue Pensions Manual
When
you have finished cringing at the admittedly appalling juxtaposition of a
classic of its genre and a somewhat unexciting piece of work, you will probably
have to agree that the Revenue Pensions Manual is a critical document for
anyone practising in pensions, be they providers or advisers. And it has been recently revised by Revenue
with changes being made to several chapters and new ones being written.
A
detailed review of the changes is beyond the scope of this blog, but it suffices
to point out that some aspects of the revised manual are, well, good, others
are bad and some are a bit ugly.
First,
the good. Chapter 22 on Pension Adjustment Orders confirms that either a
pension adjustment order or a property adjustment order can be used for ARF and
AMRF benefits. Previously there had been
a concern that a transfer of benefits from an ARF/AMRF to the ARF/AMRF of a
spouse, on foot of a property adjustment order, would give rise to a
distribution for tax purposes and a consequent income tax hit.
The
same section of Chapter 22 confirms that the recipient spouse or civil partner
can set up an ARF without qualifying for it under the Taxes Consolidation
Act. While this is to be welcomed, it
does seem remarkable that Revenue has the discretion, with no legislative
authority, to grant tax relief for a whole segment of society.
As for
the bad, it’s not that the changes are bad – it’s more the lost opportunity to
correct some issues that are crying out for change. For example, the manual continues to provide
that a proprietary director who takes their benefits due to ill-health must
dispose of their shareholding. While
there may be some justification in making the disposal of shares a condition of
early retirement - to prove genuine withdrawal from service where the
person is otherwise fit (though one would think that a P45 should do the trick)
- there seems no reason why a person who has to retire because of ill-health
should be subject to the same condition. This requirement may have been imposed in
error because Revenue systematically put the rules on ill-health in the chapter
on early retirement. And in practice Revenue even demand the sale of
shares in cases of retirement due to serious ill-health - these are the cases,
known as the death’s door concession, where the member only has weeks rather
than months to live.
As for
the ugly, and admittedly this is just a pet peeve of mine, I would have
preferred it if the whole manual had been treated as a single document and
someone had gone through it with a view to making it more readable or even to
format it consistently. Granted, this is
not an easy task with what is essentially a very dry and rule-bound subject,
and it is probably a resource issue (and that cannot make things easy), but
given that it is a primary source material for an important, albeit often
unacknowledged, area of most people’s lives it is a shame that there wasn’t
time for someone to give it the care and attention I feel it merits.
One final
comment concerns the process by which the manual is put together. There seems to be a lack of consultation in
the production of revisions to the manual.
For example, our understanding is that the Revenue officials who deal
with advisers on a day-to-day basis have little input into the manual. That is a pity because surely they are the
ones who know the kind of issues that are relevant to advisers and, more
importantly, pension scheme members.
And, apart
from consulting those closest to the issues, perhaps Revenue might also enter
into a consultation process with the industry, in the same manner practiced by
the Pensions Board and the Central Bank, before engaging in further updates of
such an important policy document as the manual. Such an approach may benefit all parties
involved, to include Revenue.
It
would also save us from blogs with excruciating headlines.
Head of ITC Consulting and Group Legal
Thursday, September 5, 2013
4 Reasons to Recommend ITC
Independent Trustee Company are delighted to
announce that we have been shortlisted in four categories for the Irish Pension
Awards 2013. The awards, which will take place on the 27th of
November 2013, aim to give recognition to pension funds and providers who have
proved their excellence, professionalism and dedication to maintaining high
standards of Irish pension provision.
The categories that we have been shortlisted for
can be seen below.
- Pensions Consultancy of the Year (ITC Consulting)
- Pension Scheme Administration of the Year (ITC)
- Communication Award (ITC)
- Innovation Award (ITC) (ITL)
We are delighted to be shortlisted in the category
nominations listed above. More information on the awards can be found here.
Thursday, August 15, 2013
'Lots of talk but no action to tackle pensions crisis'
Monday, August 12, 2013
Job Vacancy: Minister for Pensions
Aidan McLoughlin speaks about the need for a dedicated pensions minister in Ireland on RTE Radio 1's 'Morning Ireland'.
Aidan states "There has been much talk about Ireland emulating
the pension regime of other countries, Australia and the UK in particular.
Critically, each of those countries has a dedicated pensions minister at a time
when reform was required."
Click here to listen to the full interview.
Thursday, July 25, 2013
The Young IBA Croagh Patrick Climb, 2013
Saturday, July 20th, saw over 160
Insurance industry colleagues climb to the top of Croagh Patrick in aid of a
very worthy cause; Saint Vincent de Paul charity. This event was organised by the Young IBA and
was a resounding success. Everyone
reached the top and enjoyed scenic panoramic views of Mayo and a great sense of
accomplishment. The sun shined down on
the climbers throughout the journey with clear blue skies all around. Everyone made it back down without any major
injuries and met in the pub at the foot of Croagh Patrick to celebrate the
achievement.
ITC were proud sponsors of the Young IBA Climb for
the fourth consecutive year. The event
is set to raise a significant amount in aid of Saint Vincent de Paul. Well done to all involved!
www.independent-trustee.com
Wednesday, July 3, 2013
Ask Us Any Question
Here at Independent Trustee Company we are always
looking to enhance and improve communication with you and your clients. This is why we have implemented a new Q&A
platform to our website; www.independent-trustee.com. It is called Pubble and it allows you to ask
questions in an interactive way and receive immediate responses. Being able to communicate clearly and
effectively with advisors is one of the most important aspects of our business,
and while we have a FAQ section on the website, Pubble allows you to get answers
to more specific questions through the ITC website. Lots of universities are
using this today, however, we are the first in the pension industry to use it.
The benefits of Pubble are as follows:
1) Enables
visitors to ask questions relating to the content on that particular page and
find answers
2) Delivers
questions direct to the relavant ITC
staff
3) Allows
visitors to view other questions which have been answered on each page
4) Ensures
that our FAQs are relevant and up to date.
We hope this will change how we interact with our
audience while continually enhancing our web site. The web is being rebuilt around people and
ITC want to put you at the centre of our website. If you have any question you would like to
ask us regarding the content of our website or about Pubble please visit www.independent-trustee.com and
click on the questions tab. We look
forward to hearing from you and answering all of your questions!
Wednesday, June 26, 2013
ITC to sponsor Young IBA Climb 2013
Independent Trustee Company are delighted to once again support the
YIBA annual charity event for the fourth consecutive year. The charity of
choice for 2013 is St. Vincent de Paul.
The event will take place on 20th July this year and the challenge once
again is Croagh Patrick! All details of accommodation, the online donation page
and registry links are available here.
Interested in climbing Croagh Patrick with your industry peers in aid
of St. Vincent de Paul? Join the YIBA Committee, broker staff, insurance staff,
family, friends and ITC staff on 20th July 2013 as we ascend the Reek followed
by some food, drink, music and plenty of craic. No entry fee, no minimum amount
to be raised- just turn up, climb and raise as much as you can for St. Vincent
de Paul. It is guaranteed to be a great weekend so if you are interested in
taking part, or donating to the cause, please click on the above link.
Get involved!
Tuesday, June 18, 2013
What is the Value of a Promise?
It is estimated that
90% of defined benefit schemes in Ireland are in deficit and that the pension
schemes of 200,000 individuals are in danger of collapse with the new rules
regarding funding requirements. You will
most likely see more of your clients coming to you asking what to do next.
The defined benefit
scheme was the holy grail of pension schemes for a long time. You were guaranteed a certain level of
pension in retirement based on your years of service and salary. What you effectively have is a promise and
now you must ask yourself what value you
can put on a promise from a scheme which is in deficit. When advising clients who are considering
exiting a defined benefit scheme, you must take particular care. The client is considering giving up what
could be a very valuable benefit, if the scheme can deliver on the
promise. However, if there are doubts as
to the ability of the scheme to deliver or even survive, you would need to
consider whether the client would be better off taking a transfer value now and
putting those funds to work for them.
When an individual
ceases employment or leaves a company pension scheme, or the company pension
scheme is wound up, there are a number of options available to them. Taking the transfer value to a buy out bond
is becoming increasingly popular among clients.
The trustees of the existing company pension scheme will establish a buy
out bond in the individual’s name and transfer the value of their benefits to
the bond. The aim is to put the
individual in control of their pension benefits. The buy out bond has fewer restrictions with
regards to investments and often more favourable costs than a PRSA. The buy out bond can also provide greater
flexibility when accessing benefits.
Independent
Trustee Company has recently launched their new Buy Out Bond. To find out more about ITC’s BOB download our Brochure & Terms
and Conditions.
Written
by Jennie Faughnan
ITC Consulting
For
further information contact our team to discuss:
Michael
Keyes (01) 614 8045 / michael.keyes@independent-trustee.com
Sean
Mc Loughlin (01) 614 9220 / sean.mcloughlin@independent-trustee.com
Martin
Glennon (01) 603 5130 / martin.glennon@independent-trustee.com
Tuesday, June 11, 2013
Ignoring the Elephant in the Room
The Social welfare and Pensions (Miscellaneous Provisions) Bill 2013 was announced by the Minister for Social Protection, Joan Burton TD on 22nd May 2013. The main pension provisions of the Bill were:
§ The
Pensions Board will change its name to Pensions Authority and its governance is
to change. The Pensions Authority will
consist of an independent chairperson appointed by the Minister for Social
Protection and 2 ordinary members, one nominated by the Minister for Social
Protection and a representative of the Minister for Finance.
§ A
new Pensions Council will be established.
The Pensions Council will have a purely advisory function. The Pensions Council will consist of:
v A
chairperson;
v A
representative of the Minister for Social Protection;
v The
Pensions Regulator;
v A
representative of the Central Bank;
v A
representative of the Department for Public Expenditure and reform; and
v Up
to 8 other members who the Minister for Social Protection considers to have the
relevant skills, specialist knowledge, experience or expertise to enable them
to carry out their functions under the Pensions Act.
§ The
name of the chief executive of the Pensions Board will be changed to the
Pensions Regulator and s/he will be a member of the Pensions Council.
§ The
Pensions Board will be given the power to wind up a pension scheme where the
scheme is underfunded and the trustees and employer are not in a position to
adopt a funding proposal, and where the trustees of the scheme fail to comply
with a section 50 direction to restructure scheme benefits.
§ The
introduction of a provision for an appeal to the High Court on a point of law
following such a direction from the Pensions Board, or following a direction
from the Pensions Board regarding a Section 50 order to reduce benefits “made other than on application by the
trustees”.
While the above changes
to the governance and oversight of pensions are largely welcomed, what is
disappointing is that the Bill does not include the much promised proposed
reform to the priority order rule, i.e. the order in which assets are
distributed when a defined benefit pension scheme is in wind-up. With a deadline of 30 June 2013 for the
submission of funding proposals, for many schemes the decision not to address
this issue in this Bill would seem to be a missed opportunity to reinstate some
fairness between members of defined benefit schemes.
The reason given by the
Minister for not dealing with this issue is the recent Waterford Crystal case
in which the EU ruled that the Irish government had failed to implement the EU
Directive requiring governments to provide protection for scheme members where
the employer was insolvent. While it is
of some relevance, the feeling is that this is just an excuse for the Minister
failing to grasp the nettle of pension reform.
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