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.
Posts Tagged ‘Pensions’
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.
If you wish to review your pension, contact Noone Casey here
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:
- Employee pension contributions will no longer qualify for PRSI relief and the health levy
- For 2011, marginal relief will be at 41%
- With effect from January 1, employers’ PRSI will apply to 50% of employee pension contributions, including Additional Voluntary Contributions (AVCs)
- The annual earnings cap for pension relief will fall from €150,000 to €115,000. The €115,000 earnings cap will also apply to contributions made in 2011 in respect of the 2010 tax year
- Tax relief will be reduced to 34% in 2012, 27% in 2013 and 20% in 2014
- Effective December 7, 2010, the maximum allowable pension fund for tax purposes is limited to €2.3m. Higher thresholds apply between €2.3m and the previous threshold of €5,418,085
- Effective January 1, the maximum allowable tax-free lump sum drawdown from a pension fund on retirement will be €200,000 – anything over this amount will be taxed at the standard income tax rate of 20% up to €575,000 and at the taxpayer’s marginal rate above this amount