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.

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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.

Paul Gilmer

Director

ITC Consulting

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.”

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.

Goal Jersey Day in ITC

On Friday the 11^th 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.

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. 

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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

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.

We look forward to your attendance.

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