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.

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Fianna Fail Launches Pension Strategy Paper

The Fianna Fail pension strategy, launched today by Willie O’Dea, deals with several issues close to our heart:

1.       The funding requirements for DB schemes

2.       The priority order for DB schemes on wind up

3.       Early Access to Pensions and

4.       The issue of Pension Charges

As chair of the Pensions Committee of the IBA I have actively involved in communicating with politicians of all shades on the issues facing pensions. The paper launched by Willie O’Dea is testament to the fact that patient and consistent dialogue does have an impact.

The funding levels DB schemes have to met is set at artificially high levels due to:

1.       the historically low level of bond yields and

2.       the additional reserve requirement imposed by the current government

The Paper proposes that this be addressed by easing the funding requirements and allowing greater flexibility as to when and if annuities are purchased.

In relation to the priority order the Paper suggests that, once a certain level of pension has been guaranteed in priority to pensioners the balance should rank equally with other members of the scheme. This would address the big gap in benefit that can exist between members either side of retirement age.

The current early access regime is too restrictive (as it only applies to AVCS) and mean spirited (as it imposes an additional 41% tax on those in difficult financial circumstances). The solution proposed is to replace it with an option to take some or all of your tax free lump sum at any stage in your life. There is no loss of tax to government and the greater flexibility enhances the attractiveness of pensions and gives relief where it is due.

On pension charges the Paper proposes the development of a Total Expense Ratio so that fund manager costs can be more easily identified. Also greater transparency on other costs is advocated.

 

To view the full paper click here.

Written by Aidan McLoughlin

Independent Trustee Company

Managing Director