Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The Finance Act 2013 provides members of occupational pension schemes with a three-year window of opportunity from 27 March 2013 during which they can opt to draw down, on a once-off basis, up to 30% of the accumulated value of AVCs. The provisions also apply to AVCs made to personal retirement savings accounts. Administrators of AVC funds, including PRSA administrators, are required to provide within 15 working days of the end of each quarter, commencing with the quarter ending on 30 June 2013, certain statistical information to the Revenue Commissioners in relation to AVC and PRSA pre-retirement transfers or encashments made during the quarter in question. The tax deducted from the aggregate value of transfers made in the period to 31 December 2013 - the latest date for which details are available - was close to €26 million. The yield from this measure was estimated in budget 2013 at €100 million in 2013 and €200 million in total over three years.

Pre-retirement access to a portion of AVCs is allowed on a tax-neutral basis. The contributions were tax-relieved at the individual's marginal income tax rate on the way in and are taxed at the individual's marginal income tax rate on withdrawal. The take-up of the measure to date has not been particularly significant, with transfers or encashments running at an average of €22 million per quarter up to the end of 2013. I would remind the Deputy, however, that this is a measure which was designed to enable rather than to incentivise individuals to access part of their pension savings beyond their regular or compulsory pension contributions. It is important that individuals continue to provide for their retirement and it would appear that most individuals with AVCs have, to date, decided to preserve their AVC pension savings for this purpose.

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