Vol. 513 No. 4
150 Mr. Penrose asked the Minister for Finance the changes made in the Finance Act, 1999, in relation to benefits payable under pension contributions and payments made by a self employed person; the opportunities provided by this Act; the way in which this person can take the plan benefits; and if he will make a statement on the matter. [2712/00]
As the Deputy is aware, I introduced significant changes to pension arrangements for the self-employed and Proprietary Directors in Finance Act, 1999. These new arrangements have proven to be very popular and have been widely welcomed by both beneficiaries and the industry.
In brief, the new arrangements increased significantly the tax deductible amounts which the self-employed and proprietary directors can set aside each year to fund their retirement benefits. Depending on age and occupation amounts of up to 30% can now be set aside. Furthermore, I have introduced a greater degree of personal choice and flexibility in relation to drawing down these benefits. The old rule which forced pensioners to take out an annuity has been abolished for these categories. The self-employed and proprietary directors now have the option of choosing between purchasing an annuity or receiving the balance of the fund in cash – the amount received is of course taxable – or investing in an approved retirement fund. An ARF allows the individual control over how the pension fund is utilised during their retirement and also allows the individual to retain ownership of the fund and to pass on any balance remaining in the fund following their death.
The Revenue Commissioners have produced an excellent booklet which outlines these new pension arrangements. This booklet has been widely circulated and I have arranged for a copy of this booklet to be forwarded to the Deputy.
