Seán Barrett (Dún Laoghaire, Fine Gael)

The Minister for Finance set up this system whereby people were given an alternative as to whether they would purchase an annuity or else put the money into an approved retirement fund and draw down their income from that. The main difference, from the State's point of view, is that the State is guaranteed for all time, so long as the fund remains in place, and PAYE is paid on all of the income taken, right down to the day there is no income left. This is compared with an annuity where tax dies when the person dies and this could be after five or six years. Therefore, the State gets more PAYE from an ARF than from annuities. I am asking the Minister a straight question. Can he tell me who on God's earth decided only recently in a circular from his Department that ARFs are not pension schemes and are instead retirement funds? Withdrawals from ARFs are liable for PRSI at Class S. What benefits does a person get paying Class S contribution from the Minister's Department if he or she is being asked to pay when in retirement and receiving an income which is fully taxable, as is the same with annuities?

See this speech in context