Gerald Nash (Louth, Labour)
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17. To ask the Minister for Finance the estimated full cost to the Exchequer from 2026 to 2029 as a result of the changes he proposes to make to the standard fund threshold in respect of pensions; and if he will make a statement on the matter. [37977/24]

Jack Chambers (Dublin West, Fianna Fail)
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The Standard Fund Threshold (SFT) is the maximum allowable pension fund on retirement for tax purposes which was introduced in Budget and Finance Act 2006 to prevent over-funding of pensions through tax-relieved arrangements.

I am informed by Revenue that they are unable provide a costing for changes to the SFT. Information on the numbers and values of individual pension funds or on individual accrued benefits in pension schemes are not generally required to be supplied to Revenue. Therefore, currently there is no readily available underlying data or methodology on which to base reliable estimates of any possible costs arising from changes to the SFT as outlined by the Deputy.

As the Deputy will be aware, the examination of the Standard Fund Threshold has recently concluded and in the context of this examination my officials examined the issue of estimating the impact of changes to the SFT using only the available information about previous payments of Chargeable Excess Tax (CET). Following this examination, the Department has prepared some indicative estimated costs, based on the information available. I would note that these estimated costs do not take account of behavioural changes and are based on a reduction of the current CET yield.

The table below sets out the indicative estimated costs from 2026 to 2029 on foot of the Minister's intended changes to SFT regime.

It is important to note that the indicative costs above relate only to CET. All pension are subject to tax on drawdown (with the exemption of a tax free lump sum). The examination of the SFT noted that this tax paid on drawdown should be included in any overall consideration of the cost of pensions tax relief, which could be better characterised as tax deferred. The issue of calculating the cost of pension tax expenditure will be considered by the implementation group to be established to consider further a number of the recommendations in the report.