Simon Harris (Wicklow, Fine Gael)

I thank Deputies Doherty and Gould for their contributions. I should point out for clarity these changes in relation to the standard fund threshold were legislated for in the Finance Act 2024. It set out three specific aspects of the SFT regime, one of which was a technical change. The then Minister for Finance did not bring forward further changes to the standard fund threshold above and beyond what was legislated for and outlined last year. In many ways - not to speak for his thinking but I was privy to it as a member of the Government - that was because we did not have an income tax package in this year's budget and it was important to have a balanced approach. Future changes to the SFT will be considered in the context of annual budgets during the lifetime of this Government.

For context, I remind Members the SFT was reduced to €2 million in 2014 and has remained at this level since then. During that time there have been significant changes across a range of economic factors, including consumer price inflation and wage inflation. The then Minister therefore considered a targeted and focused examination of the current calibration of the SFT should be carried out. It was not carried out by the Government but by an independent expert, Dr. Donal de Buitléir. He was appointed to lead the examination with support from the Department of Finance. It looked at the current pension landscape, the current calibration of the SFT and the potential impact on recruitment and retention in the public service. I am not being argumentative but when we talk about these people, this is about roles in the public service and making sure we can recruit and retain people in the public service, including in senior positions involved in the security of the State and the running of public services.

The purpose of the amendment, and of the identical one proposed on Committee Stage, is to require the preparation of a report on the costs of increasing the SFT to €2.8 million. My understanding is my predecessor explained there are difficulties in costing the changes to the SFT, perhaps for some of the reasons the Deputy outlined, in particular that information on the numbers and values of individual funds or on individual accrued benefits in pension schemes are not generally required to be supplied to Revenue. There is, therefore, no underlying data available to Revenue on which to base reliable estimates. The Minister made that clear on Committee Stage. Consequently, the Department prepared indicative estimated costs based on the information available and shared those with the Deputy and others in the House in response to parliamentary questions, most recently on 21 October. The then Minister also gave a perspective on these costings during the Committee Stage debate, including a commitment to provide whatever information could be gathered in relation to the number of persons in 2023 who have availed of the option to pay it over 20 years. In this regard information was supplied by the NSSO on this matter. The information that was supplied is independent of politics and is the best information available.

Using the model, the indicative estimated costing of increasing the standard fund threshold is as follows: for 2026, the indicative costing is €10.5 million, for 2027 the indicative costing is €14.5 million, for 2028 the indicative costing is €8 million and for 2029 the indicative costing is €5 million. While the change in the SFT for 2030 is not set and will depend on the changes in earnings over the period from 2025 to 2029, an estimated cost of €500,000 has been included in the costing for this change. I would note that these estimated costs do not take account of behavioural changes - which is a legitimate point the Deputy raises - and are based on a reduction of the current CET yield. Any assessment of behavioural changes would be highly speculative and I am not convinced of the value of such an exercise.

I will be considering the future impact of the SFT recommendations in the context of future budgets.

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