BALANCING PENSION THRESHOLDS
Only 13% of employers believe the Government can tackle Ireland’s pension problems, according to a report of a recent survey in The Sunday Business Post.
Only 13% of employers believe the Government can tackle Ireland’s pension problems, according to a report of a recent survey in The Sunday Business Post.
Investment in group and self-employed pensions slumped last year amid an overall decrease of 11% in new business, according to the latest figures from The Irish Insurance Federation.
Wealthy individuals are diverting some of their retirement savings away from pensions following the Budget crackdown on pensions that places a punitive tax on funds greater than €2.3m, says The Sunday Times. Pension funds with more than this amount are subjected to tax at 69% charged at retirement and on withdrawal of the funds.
The value of Irish pension funds grew by 4% last year to €75 billion, despite the tough economic climate, The Sunday Business Post reports.
Research to be published this week by the Irish Association of Pension Funds shows a growth rate of almost 10% for 2010 but this was diluted by an overstated overall figure for 2009. The research also shows the migration of funds from equities towards bonds by defined benefit schemes in particular.
An individual may no longer be able to claim tax relief on contributions he or she makes to a pension fund after it reaches €1.5m – and possibly even less – under proposals suggested in the Programme for Government, The Sunday Business Post reports.
Divorce has always had the potential to be seriously damaging to financial health but now wealthy individuals will be unable to replenish their pension pots because of “the Revenue’s rigid interpretation of new pension limits provisions”, according to The Sunday Times.
A new study of female pension provision by IFG Corporate Pensions shows reduced working hours, combined with career breaks and the proverbial glass ceiling translate to far smaller pension funds for working mothers, The Sunday Business Post reports.
The study finds that the final value of a woman’s pension could be up to 60% lower than a man’s.
Part-time work, career breaks to have children and missed promotional opportunities as a result of taking the time out all affect the final pension.
“The irony is that women actually require more money than their male partners at retirement, as longevity statistics would indicate that women who reach retirement age can now expect to live until 88, compared to men’s life expectancy of 85,” said Samantha McConnell, director at IFG Corporate Pensions.
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The insurance industry wants the Department of Finance to reverse a perceived anomaly in the Finance Bill that undermines PRSAs, according to The Sunday Times.
The main changes announced include:
“Personal private pension contributions may become a thing of the past if the Recovery Plan’s proposals are implemented to restrict tax relief for personal pension contributions for employees and the self-employed,” according to John Heffernan, head of Ernst & Young’s regional tax services.
Irish Life and Zurich Life, two of the biggest pension providers in the country, have asked the Government to impose a €200m levy on retirement funds in the upcoming Budget rather than cut tax relief on contributions, The Sunday Times reports.
The Government’s €6 billion Budget plans may founder on proposals to cut the state pension, with Fianna Fail backbenchers threatening revolt over the issue, The Sunday Times reports in its lead story.
Civil service pensions may be brought in to line with private sector pensions if a proposed Fianna Fail reform goes ahead.