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

I am aware of the proposal made by the society at the time. That was considered. A number of alternative options were explored, including an additional separate BIK limit for employer contributions to PRSAs and the new PRSA product mimicking the salary-based limits on occupational pension schemes to be used where an employer wished to make contributions to an employees PRSA.

However, both of these options were ultimately rejected. While an additional BIK-free limit for employer and employee contributions could result in an effective equalisation for most individuals, given the low levels of contributions, the rules for tax treatment of contributions would not be equalised. It was considered unlikely to be seen by stakeholders as meeting the recommendation of abolishing differential treatment of PRSAs. It would introduce new rules into an already complex and legal regulatory framework.

On the suggestion that the interdepartmental report was misinterpreted, the officials from the Department of Finance would have been part of that interdepartmental group, would have had an understanding of the intention behind the recommendation and would have fed that into the decision that was made at a policy level at the time.

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