John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context

Question 9: To ask the Minister for Finance the number of persons here with pension pots in excess of €2.3 million according to the records of the Revenue Commissioners; and if he will make a statement on the matter. [39135/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

I am assuming that the Deputy is referring to the number of persons with pension pots in excess of the Standard Fund Threshold (SFT). The SFT is the maximum allowable pension fund on retirement for tax purposes which was introduced in Budget and Finance Act 2006 with effect from 7 December 2005, to prevent over-funding of pensions through tax-relieved arrangements. The SFT limit was initially set at €5 million, but had increased to just over €5.4 million by 2008 through indexation. The legislation also provided for a higher limit (known as the Personal Fund Threshold or PFT) where individuals had pension rights with values in excess of the SFT on 7th December 2005. Such individuals could protect their higher pension values by applying to the Revenue Commissioners for a PFT certificate.

The SFT was substantially reduced in Budget and Finance Act 2011 to a level of €2.3 million with effect from 7 December 2010. Transitional arrangements were again provided to protect the capital values of the pension rights of individuals where these exceeded the reduced SFT on that date. However, in the case of these PFT applicants the PFT was not permitted to exceed the level of the previous SFT of €5,418,085.

I am informed by the Revenue Commissioners that, according to their records, they

* issued 110 Personal Fund Threshold (PFT) certificates to individuals in respect of the original SFT limit of €5 million, and

* to date have issued 727 PFT certificates (out of 1,200 PFT applications received to date) in respect of the lower SFT limit of €2.3 million.

In that regard, the Commissioners have pointed out that the statistics on PFT certificates issued represent a "snapshot" of the number of individuals whose pension rights on 7 December 2005 and 7 December 2010 respectively exceeded the value of the relevant SFT on those dates. As the remaining PFT applications are processed this number is likely to increase. The Commissioners have also advised me that there is no ongoing monitoring of PFT amounts by them and given recent investment market volatility, which would have impacted in particular on defined contribution type pension arrangements, coupled with the fact that some of the individuals concerned are likely to have since retired, it is not possible to state how many individuals continue to hold pension pots in excess of €2.3 million.