Financial Resolution No. 6 provides for the reduction from €5.4 million to €2.3 million, with effect from today, in the limit on the maximum tax relieved pension fund that can be built up by an individual. This is known as the standard fund threshold. Individuals with pension rights in excess of this new lower standard fund threshold on budget day will be able to protect the capital value of those rights by claiming a personal fund threshold. Such transitional measures were also recommended by the Commission on Taxation to deal with circumstances where an individual's pension rights had already exceeded any revised lower limit. The legal advice to the Government was to the effect that the absence of such grandfathering arrangements, which also applied when the standard fund thresholds were first introduced on 7 December 2005, would be difficult to defend against constitutional and legal challenges. The personal fund threshold will be calculated on the aggregate of the capital value of pension benefits to which the individual has already become entitled since 7 December 2005 plus the capital value on budget day of any uncrystallised pension rights that the individual has - in other words, pension rights that the individual is building up but to which he has not yet become entitled. Where this amount exceeds the standard fund threshold of €2.3 million, that higher amount will be the individual's personal fund threshold.

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