Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 15:

In page 21, before section 16, to insert the following new section:
“16. — The Minister for Finance shall, as soon as may be after the passing of this Act, prepare and lay before Dáil Éireann a report on the provision of early access to pension benefits in certain limited circumstances including employer paid contributions, regular employee contributions, self-employed personal pensions and Personal Retirement Savings Accounts.”.

This amendment relates to the initiative announced in the budget allowing access to certain funded AVCs. This area has been the subject of much commentary over the past number of years and I welcome the move the Minister is making in this area to allow people, in limited circumstances, to draw down some of the moneys that have been paid into their pension schemes. I acknowledge this is an area of policy where the Minister needs to be careful and we certainly need to ensure that people are incentivised to continue to provide for their retirement. However, the Minister could have gone further. What he has done is very narrow in its scope, although it is a first step. For example, the type of contributions that are excluded from this initiative include employer-paid contributions, regular employee contributions, self-employed personal pensions, normal PRSAs and AVCs made for the purposes of purchasing notional added years. Therefore, this provision is only a tentative first step towards allowing access to pension funds in certain limited circumstances.

My amendment calls for a report on the broader possibilities of allowing limited access to employer-paid and employee contributions and certain self-employed and PRSA contributions. I note the money drawn down under the Minister's proposal will be subject to income tax at that marginal rate and he projects a yield of approximately €100 million this year from that measure. Amendment No. 17 proposes that a person would be allowed to draw down money under this measure, but from the taxation perspective that what they draw down could be set off against the tax free retirement lump sum so as to further incentivise people to draw down some money under limited circumstances.