Dáil Éireann Debate, Wednesday - 6 April 2016
178. Deputy Jack Chambers asked the Minister for Finance if he will allow persons who have made additional voluntary contributions and have drawn down 30% of the fund value, to draw down the remaining 70%; and if he will make a statement on the matter. [6217/16]
Amharc ar fhreagraFinance Act 2013 introduced Section 782A of the Taxes Consolidation Act 1997 which provided members of occupational pension schemes with a once-off opportunity to access up to 30% of their Additional Voluntary Contributions (AVCs) prior to retirement. The option was available for a three year period from 27 March 2013, the date that Finance Act 2013 was passed into law, and came to an end on 26 March 2016.
There are a number of reasons why pre-retirement access to pension savings is not permitted on a general basis, the principal one being that these arrangements (and the associated tax reliefs on contributions and pension fund growth) are designed to be long term savings vehicles based on the principle that the benefits will be "locked away" to help fund an adequate income in retirement.
The pre-retirement access to a portion of AVCs which I introduced in Budget and Finance Act 2013 was allowed on a tax-neutral basis the contributions were tax-relieved at the individual's marginal rate on the way in and were taxed at the individual's marginal rate on withdrawal. This was a measure designed to enable rather than incentivise individuals to access part of their pension savings beyond their regular or compulsory pension contributions and the take-up of the measure has not been particularly significant. It is important that individuals continue to provide for their retirement and, it would appear, most individuals with AVCs decided to preserve their AVC pension savings. I have no plans to reintroduce the measure along the lines suggested in the question.
