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

As recommendations Nos. 8 to 13, inclusive, relate to subsections (2) and (6) of section 17 of the Bill as passed by Dáil Éireann, I propose to deal with them together. These subsections deal in one way or another with the temporary rescinding of certain of the provisions included in the Finance Act 2011 relating to the ARF access conditions which were introduced in the context of the extension of the ARF option to all defined contribution occupational pension arrangements at that time.

The impact of the Senator's recommendations, if accepted, would be to continue with the more challenging conditions attaching to accessing the ARF option which my changes are designed to ease for a transitional period and which will have the greatest impact on those with modest pension incomes and modest pension savings.

I received many representations, including from the Pensions Ombudsman, about the fact that the Finance Act 2011 increase to ¤18,000 per annum in the guaranteed pension income requirement for ARF purposes, and to ¤119,800 in the maximum set-aside amount for AMRF purposes, were introduced without the provision of adequate transitional arrangements. It has been put to me that it is unfair that many individuals who had been planning for retirement based on the original requirements of the legislation were suddenly faced, and indeed continue to be faced, with having to meet much more stringent conditions without any time to prepare for them. This is why I have decided to reinstate the old limits of ¤12,700 and ¤63,500 in respect of ARF options exercised on or after the date of the passing of the Finance Act 2013.

It is intended that the higher guaranteed pension and set-aside limits introduced by the Finance Act 2011 will be put in place again in three years time which will give individuals preparing for their retirement after that period time to adjust to these more stringent higher requirements.

I gave a very detailed explanation of the background and rationale for the changes I am proposing to Deputy Pearse Doherty on Report Stage in the Dáil and that explanation is in the Official Report. For the reasons outlined I do not propose to accept the Senator's recommendations.