Written answers
Tuesday, 18 October 2022
Department of Employment Affairs and Social Protection
Pension Provisions
Ruairi Ó Murchú (Louth, Sinn Fein)
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546. To ask the Minister for Employment Affairs and Social Protection if she will consider reinstating one-member arrangements and make those with less than ten members exempt from the additional audit functions; if not, if she will allow for the readjustment of a personal retirement savings account product to allow contributions from employer to employee to be exempt from USC benefit-in-kind; and if she will make a statement on the matter. [52468/22]
Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The IORP II Directive, which became effective from 13 January 2019, sets out minimum standards for the management and supervision of pension schemes, with the objective of ensuring the soundness of occupational pensions and better protections for scheme members and beneficiaries across the European Union.
IORP II requirements were transposed into Irish law by way of the European Union (Occupational Pension Schemes) Regulations 2021 (S.I. No. 128 of 2021) which came into force on 22nd April 2021.
The general principle followed in respect of the transposition of IORP II, in keeping with the Government’s Roadmap for Pensions Reform, is that the requirements of IORP II apply to all schemes and trust RACs, including one-member arrangements (‘OMAs’). This is in order to ensure that all members and beneficiaries are afforded equal protection irrespective of the size of the pension arrangement. It should be noted that the decision to apply the requirements of IORP II to all schemes and trust RACs was announced by the Government in 2019 and it was expected that trustees and insurance providers would have been preparing for compliance with these requirements in advance of transposition.
The Report of the Interdepartmental Pensions Reform and Taxation Group (IDPRTG) published in late 2020 set out a number of measures to aid in the harmonisation and simplification of supplemental pensions. One of these relates to the abolition of the differential treatment of PRSAs for funding purposes, and the BIK treatment of employer contributions to PRSAs.
The Group, chaired by the Department of Finance, comprising officials from the relevant Departments and organisations reconvened in 2021 to consider implementation of the various recommendations. Following enactment of a package of tax-related measures in the Finance Act 2021 a number of further proposals from the Report are currently being worked on, some of which are technical in nature and others which have wider policy implications necessitating careful consideration through the normal policy channels.
The progression of measures relating to the taxation of PRSAs is a matter for the Department of Finance.
I trust this clarifies the matter for the Deputy.
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