New Years Resolution!

Complete trustee training and avoid €2k fine!

Almost two years ago, the Pensions Board introduced a requirement for all pension scheme trustees to complete trustee training. For any trustees appointed prior to that date they have two years to complete the training so the 1^st February 2012 is the deadline for many.   

The concern is that many who are due to complete the training have not yet done so because of lack of awareness of their obligations. 

3 Common Misconceptions

·      There is an assumption that this training is for bigger pension schemes only but that’s not the case.  If the employer fail to provide training to all the relevant parties they may be prosecuted. In addition a trustee who does not undergo the training may be subject to an on-the-spot fine of €2,000 by the Pensions Board.

·         One or two person company pension schemes where the employer is the trustee.  Many of these employers may not realise they are still officially the trustees of such schemes particularly where the scheme was established for an employee who has since left the company.  However,  the employer remains as the trustee and must comply with the requirements.

·         Directors must receive training even if the scheme is only established for one of them. The key point is that; if the employer is the trustee (as is normal for one person schemes) then ALL the directors must complete the training.

Independent Trustee Company have developed an on-line tool to help those who are unsure of their requirements find out if they are actually required to complete the training.  It’s a quick process and can be found on www.trustee.ie

Revenue discover 115,000 pensioners

Following on from our previous post, Aidan McLoughlin was interviewed on Morning Ireland about the shock revelation from the Revenue that 115,000 pensioners have been underpaying tax on their Social Welfare pensions. The reason apparently is because the Revenue didn't know they were in receipt of Social Welfare pensions and therefore hadn't factored this extra income into their tax allowances.

Listen to the podcast here.

Could the pensions levy have been prevented?

The announcement by Revenue that 115,000 pensioners have been underpaying their tax will come as a shock to many. The reason apparently is because the Revenue didn’t know they were in receipt of Social Welfare pensions and therefore hadn’t factored this extra income into their tax allowances.

 

The Revenue press release on this matter indicates that the tax payable could exceed €4,000 for a single person or €8,000 for a married person. Taking the lower figure as an average it would seem that the tax foregone could amount to €460m – about the amount collected by the pension levy. Its begs the question whether or not the pensions levy could have been prevented?

 

Amazingly there is no suggestion that previous underpayments will be collected. The Revenue's focus will be on getting it right from now on. Other pensioners who paid their tax in full and are now paying a pension levy on top can only look with envy at their peers who have neither exposure.

Merry Christmas from ITC

Merry Christmas from ITC

'Christmas Jumper Day' is becoming somewhat of an annual event here in ITC. The event took place last Friday 16th December where staff were invited to wear their best Christmas jumpers in an effort to raise money for our chosen charity, Focus Ireland. The day saw €940 raised for the well deserving charity.

The staff at ITC would like to take this opportunity to wish all our readers a Merry Christmas and a Happy New Year. We will be back in 2012 with more from Ireland’s first truly independent pension’s blog!

10 years ago we had Steve Jobs, Bob Hope and Johnny Cash. Now we have no jobs, no hope and no cash!

Budget 2012 - Expectation Management 

by Aidan McLoughlin, ITC

The key theme of this year’s budget has been “EXPECTATION MANAGEMENT”.

What was normally a 3 hour event has been converted into a 3 day saga. Key features of this exercise have been:

·         to prepare the population for bad news (through an unprecedented level of kite flying as well as assistance from the German Parliament), and

·        
to ensure the previous government could clearly be shown to be responsible for the current crisis and that this government will “retrieve our economic sovereignty”.

Initial impressions are that the government has achieved some success in regard to damage limitation – “not as bad as we thought” seems to be the most common response.

Our economic sovereignty is more uncertain: the fact that we need to hear from the Germans probably emphasises where we are on this point.

Whilst the Budget is generally bleak and everyone will be a little worse off, there are some small points of hope – the increase in mortgage interest relief for first time buyers, the reduction on stamp duty on commercial property, the adjustment of the Universal Social Charge.

Equally there will be relief as regards changes that didn’t happen: tax relief for pension contributions and loss relief for capital taxes are two areas where audible sighs of relief were heard.

People will be glad to be still surviving, but the end line is still a long way off. Without offending the present government I would suggest the clear theme is perhaps “a lot done, more to do”.

For our view on other aspects of the budget, please click here. 

ITC continues to lobby the government on behalf of Advisors

Aidan McLoughlin, through his role as chairman of the Irish Brokers Association Pensions Committee, continues to be involved in lobbying the government on behalf of Advisors. Recent meetings include: 

·         TD Terence Flanagan of Fine Gael

·         TD Peter Matthews of Fine Gael

·         Senator Fidelma Healy Eames of Fine Gael

·         TD Michael McGrath of Fianna Fail

·         Senator Jimmy Harte of the Labour Party

·         Senator Michael D’Arcy of Fine Fail

·         Independent TD Shane Ross

·         The Department of Finance

·         The National Treasury Management Association (NTMA)

The Pensions Committee has developed a five point plan to make pensions more relevant in the current environment and to help protect the remaining tax reliefs. It was good to see last week that some TDs are listening and attempting to tackle the issues highlighted in the five point plan.

In addition to the above activity, ITC is represented on the several other industry groups including:

·         Association of Pensioneer Trustees of Ireland (APTI)

·         Young IBA

·         IAPF Council

·         Pensions Committee in the Law Society

·         Association of Compliance Officers

Through our blog, we will continue to keep you posted of ongoing lobbying activity.

What has the Pensions Board got to say about the Levy?

There was some interesting coverage in The Oireachtas Report which was broadcasted on RTE1 yesterday. The Pensions Board CEO, Brendan Kennedy, was questioned about the Pensions Board's role in advising the Government on the pensions levy.

The Oireachtas Report footage is here. The relevant piece starts at 12min 50. The footage will be available until 8th December 2012.