Written answers

Wednesday, 21 March 2012

Department of Finance

Pension Provisions

9:00 pm

Photo of Peter MathewsPeter Mathews (Dublin South, Fine Gael)
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Question 66: To ask the Minister for Finance his plans regarding the transfer of pension funds (details supplied); and if he will make a statement on the matter. [15229/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I understand that the question relates to the transfer of Irish pension funds abroad. The transfer of an occupational pension scheme member's pension fund benefits or a PRSA contributor's PRSA assets to an overseas arrangement is permitted subject to the transfer complying with the Department of Social Protection's "Occupational Pension Schemes and Personal Retirement Savings Accounts (Overseas Transfer Payments) Regulations 2003" and Revenue rules. Under the Regulations, in the case of occupational pension schemes, the facility to transfer only applies to a scheme member who is entitled under the Pensions Act 1990 to "preserved benefits" under the scheme - in other words to a scheme member whose service in the relevant employment has terminated .

It is the responsibility of all trustees to ensure full compliance with the requirements of the Regulations. In essence, the Regulations require that, prior to making any overseas transfer payments, the trustees must be satisfied that:

(a) The member has requested a transfer.

(b) The overseas arrangement provides relevant benefits as defined by section 770, Taxes Consolidation Act, 1997.

(c) The overseas arrangement has been approved by the appropriate regulatory authority in the country concerned.

In practice, trustees and PRSA providers are required to obtain written confirmation to that effect from the trustees, custodians, managers or administrators of the overseas arrangement to which the transfer is to be made.

If the transfer is to another EU Member State, Revenue rules require the overseas scheme to be operated or managed by an Institution for Occupational Retirement Provision (IORPS), within the meaning of the EU Pensions Directive, and to be established in a Member State of the European Communities which has implemented the Directive in its national law. The scheme administrator must be resident in an EU Member State. If the transfer is to a country outside the EU, a transfer may not be made to a country other than the one in which the member is currently employed.

Transfers that comply with the above requirements may be made without the prior approval of the Revenue Commissioners.

There are no plans at this time to change tax legislation or Revenue rules regarding the tax treatment of transfer payments. While tax issues may or may not be relevant in relation to transfers of Irish pension funds abroad, policy and legislation governing transfer payments from pension arrangements generally are, as outlined above, matters for my colleague, the Minister for Social Protection.

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