Seán Ardagh (Dublin South Central, Fianna Fail)

I am happy to support Financial Resolution No. 4. The amount of wealth that has been created here during the past 20 years is amazing particularly for the number of individuals who are extremely wealthy, many of whom have contributed greatly to developments in Ireland, to employment and the capital infrastructure. The whole question of tax equity comes into it. We have been going overboard in giving an unlimited amount of pension contributions, relieved from income tax, to a large number of people who have put millions of euro into their pension fund to acquire properties into the future. Effectively, many of these pension funds are not there to provide an income for the individual but to provide a method of avoiding some form of death duty in passing on their wealth to their successors and heirs in a tax effective and efficient way. It is appropriate that this item is included in the resolution.

The lump sum limit is €1.25 million, which is lower of one and a half times remuneration, 25% of the amount in the pension or €1.25 million. That would mean that one would need remuneration of approximately €850,000 in one's final year to be able to draw a lump sum of €1.25 million. No matter what way one goes, that individual will have a lump sum of €1.25 million and some form of income in excess of €750,000 also, on which he or she pays tax. There was a crying need for this resolution and for something to be done about the massive pension contributions that were allowed against income for tax purposes for wealthy individuals while those who did not have the same resources were effectively paying for that contribution.

On the question of the SSIAs as raised by Deputy Rabbitte, it appears there is something coming down the pipeline. Perhaps it will be included in the Finance Bill. There is a need to encourage people to put money into pension funds for the future.

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