Patrick Nulty (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

To ask the Minister for Finance the amount that would be raised for the Exchequer in a calendar year if the maximum pension fund was reduced from €2.3 million to €1.5 million; and if he will make a statement on the matter. [5362/13]

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

The Standard Fund Threshold (SFT) is the maximum allowable pension fund on retirement for tax purposes which was introduced in the Budget and Finance Act 2006 to prevent over-funding of pensions through tax-relieved arrangements. The SFT was reduced in Budget and Finance Act 2011 by over 50% to a level of €2.3 million with effect from 7 December 2010 with transitional arrangements to protect the capital values of the pension rights of individuals where these exceeded the reduced SFT on that date. No underlying data are available to my Department or to the Revenue Commissioners on which to base reliable estimates of the savings from a further significant reduction in the SFT to the level indicated in the question. Information on the numbers and values of individual pension funds or on individual accrued benefits are not generally required to be supplied to the Revenue Commissioners by the administrators of pension schemes and personal pension arrangements. The estimated savings indicated at the time in respect of the Budget and Finance Act 2011 change in the SFT were quite conservative, based as they were on incomplete data and using very broad assumptions. Indeed, those underlying data and assumptions may not be directly applicable to determining the effect of a further significant reduction.

The Deputy will be aware of the announcement which I made in my Budget 2013 speech that changes to the SFT regime and other possible changes to give effect to the commitment in the Programme for Government to cap taxpayers’ subsidies for pension schemes which deliver pension income of more than €60,000 will be put in place in 2014. On page A.10 of the Budget 2013 booklet which accompanied my Budget speech, I indicated that the full-year yield from these changes is estimated at €250 million. The Budget 2013 booklet made clear, however, that the estimated full-year savings are provisional at this time as further detailed analysis of the necessary changes and their impact will be required. In this regard, my Department has been engaging with representatives of the pensions sector over some time with a view, among other things, to gathering private pensions-related data which may be of value into the future in estimating the costs of potential changes in the pensions tax area. Those engagements will continue in the context of the further detailed analysis of the changes announced in the Budget.