Fergus O'Dowd (Louth, Fine Gael)
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173. To ask the Minister for Finance if he will respond to concerns raised by a person (details supplied); and if he will make a statement on the matter. [41288/23]

Richard Bruton (Dublin Bay North, Fine Gael)
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187. To ask the Minister for Finance if he has reviewed the value of the thresholds set out for tax relief on pensions; and if he will consider adjusting them, in view of the substantial inflation since they were set almost ten years ago. [41437/23]

Robert Troy (Longford-Westmeath, Fianna Fail)
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188. To ask the Minister for Finance if he will adjust the cap on pension contributions in Budget 2024 (details supplied). [41438/23]

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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190. To ask the Minister for Finance if he will review correspondence on a matter (details supplied); and if he will make a statement on the matter. [41466/23]

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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191. To ask the Minister for Finance if he will review correspondence on a matter (details supplied); and if he will make a statement on the matter. [41467/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 157, 173, 187, 188, 190 and 191 together.

I understand that Deputy Lowry, in line with Deputies O'Dowd, Bruton, Troy and Smyth, is referring to the chargeable excess tax and Standard Fund Threshold (SFT) regime.

I am advised by Revenue that the SFT was introduced in Finance Act 2005, with the purpose of addressing excessive pension accrual, and it applies to all private and public sector pension arrangements. It is provided for in Chapter 2C of Part 30 of the Taxes Consolidation Act 1997 (TCA) which sets out the maximum tax-relieved pension fund at retirement. If the relevant threshold is exceeded, the excess over the threshold (the “chargeable excess”) is subject to an upfront, ring-fenced income tax charge (known as “chargeable excess tax”) at 40%.

The SFT was initially set at €5 million. The legislation allowed the Minister for Finance to amend the SFT in line with an “earnings adjustment factor”, which has happened on two occasions. The SFT was reduced to €2.3 million in December 2010 as part of a package of measures to deliver significant savings in the broad pension area following agreement reached with the EU/IMF.

The SFT was further reduced in Finance Act 2013 to €2 million, with effect from 1 January 2014, as part of reforms introduced to make supplementary pension provision more sustainable and equitable over the long term. The primary purpose of these changes was to further restrict the capacity of higher earners to fund or accrue large pensions through tax-subsidised sources.

It is not the case that increases in the CPI or other measures of purchasing power should necessarily automatically result in an increase to the SFT. However, as with all taxes, the tax treatment of supplementary pensions, including the SFT is kept under ongoing review.