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Pension Provisions

Dáil Éireann Debate, Thursday - 22 September 2022

Thursday, 22 September 2022

Ceisteanna (146)

Aindrias Moynihan

Ceist:

146. Deputy Aindrias Moynihan asked the Minister for Finance with reference to the one-member company pensions if the proposed changes to the PRSA will replicate all aspects of existing one-member arrangements; and if the enhanced PRSA will be included in the Finance Act 2022; and if he will make a statement on the matter. [46243/22]

Amharc ar fhreagra

Freagraí scríofa

The Interdepartmental Pensions Reform and Taxation Group (IDPRTG) was established to carry out a number of tasks set out in the Roadmap for Pensions Reform 2018 -2023. The Roadmap set out the need to promote long-term pension saving to address income adequacy in retirement, in particular for low income earners.

The IDPRTG is chaired by the Department of Finance, and includes representatives from the Department of Public Expenditure and Reform; the Department of Social Protection (DSP); the Office of the Revenue Commissioners; and the Pensions Authority. In 2020 the IDPRTG published a report which set out a number of actions to aid in the harmonisation and simplification of supplemental pensions.

Finance Act 2021 introduced a package of measures to give effect to some of the actions set out in the group’s report. These included the removal of a prohibition of transfers from an occupational pension scheme to a Personal Retirement Savings Account for members with more than 15 years’ service; the abolition of the Approved Minimum Retirement Fund; and the extension of an Approved Retirement Fund option to death-in-service benefits.

The Group continues its work to implement the actions set out in the Group's Report. Accordingly, a number of proposals from the 2020 Report are currently being worked on, some of which are technical in nature and others which have wider policy implications necessitating careful consideration through the normal policy channels. One of these actions, designed to aid in the harmonisation and simplification of supplemental pensions, is:

‘The differential treatment of the PRSA for funding purposes should be abolished, employer contributions to PRSAs should not be subject to BIK.’

As indicated in this year’s Tax Strategy Group paper www.gov.ie/en/collection/d5b41-budget-2023-tax-strategy-group-papers/ one of the pension policy issues actively being considered is to abolish the differential treatment of the PRSAs for funding purposes.

The IDPRTG focused closely on this issue during the course of 2022 and they are examining a number of methods that could be used to achieve equalisation of the funding options for occupational pension schemes and PRSAs.

However, as the Deputy will be aware, it is a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions or the Finance Bill.

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