Dáil Éireann Debate, Tuesday - 21 November 2023
165. Deputy Jim O'Callaghan asked the Minister for Finance when the review into the standard financial threshold affecting retiring members of An Garda Síochána will commence and be completed; and if he will make a statement on the matter. [50559/23]
View answerAs the Deputy is aware, the SFT was introduced in Finance Act 2005, with the purpose of addressing excessive pension accrual, and it applies to all private and public sector pension arrangements. It is provided for in Chapter 2C of Part 30 of the Taxes Consolidation Act 1997 (TCA) which sets out the maximum tax-relieved pension fund at retirement. If the relevant threshold is exceeded, the excess over the threshold (the “chargeable excess”) is subject to an upfront, ring-fenced income tax charge (known as “chargeable excess tax”) at 40%. over-funding of pensions through tax-relieved arrangements. The threshold was initially set at €5 million. It was subsequently reduced to €2.3 million with effect from 7 December 2010 and further reduced to €2 million with effect from 1 January 2014.
I have instructed that a targeted and focused examination of the calibration of the Standard Fund Threshold be carried out and a Memo for Information on this examination is expected to go to Cabinet shortly.
I would note that this examination will consider the impact of the SFT on all pensions and sectors. Terms and conditions for An Garda Síochána remain a matter in the first instance for the Ministers for Justice and Public Expenditure, National Development Plan Delivery and Reform.
This examination will include a public consultation to allow all interested parties to share their perspective on this important part of the tax treatment of supplementary pensions. The examination is expected to conclude by summer 2024.
