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Pensions by Barry Walsh

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  1. 1. Pensions Presentation Waterford WEN Barry Walsh Financial Services Manor House Cork Road Waterford. (086) 238 4225
  2. 2. Personal Pensions• Information• Most personal pensions policies are insurance policies. Unlike other insurance policies, the contributions attract tax relief if various conditions are met.• Since 1999, you are no longer obliged to buy an annuity and you also have considerable flexibility about moving between different funds.
  3. 3. Tax relief on contributions• You may get tax relief on contributions to approved personal pension arrangements. Under 30 yrs-15% of NRE 30-39 years - 20% 40- 49years - 25% 50- 54 years - 30% 55- 59 years -35% 60 and over- 40%• Since 1 January 2011 you pay PRSI and the Universal Social Charge on your pension contributions.• There is a limit on the earnings that may be taken into account. The limit is €115,000 in 2012.
  4. 4. Limit on overall value of fund• Since 7 December 2010 the maximum allowable pension fund on retirement for tax purposes is €2.3 million. If the fund is greater than the limit then tax at 41% will be charged on the excess when it is drawn down from the fund.
  5. 5. Taxation of lump sum• Since 1 January 2011 there is a limit of €200,000 on the amount of the tax-free retirement lump sum.• €200,001 - €575,000 @ 20%• Over €575,000 taxed @ taxpayers marginal rate.
  6. 6. Transfer between funds• You do not have to remain in the same pension fund. You may transfer funds accumulated with one insurer to another fund with another insurer.• When you retire, you may opt for the existing annuity arrangements or for the new arrangements. The new arrangements mean that the accumulated fund is your property. You must take your pension not later than your 75th birthday (the previous upper limit was 70).
  7. 7. After death• After death• If you die before taking any benefit from your fund, the accumulated funds form part of your estate and are distributed accordingly. Capital Acquisitions Tax (CAT) may apply.• If you die after taking benefit and you have invested in an ARF, the remaining funds form part of your estate but are regarded as your income in the year of death. Tax at your marginal rate is deducted and the remaining amount is distributed in the normal way. There is no CAT liability.
  8. 8. Levy on private pension funds• There is a levy of 0.6% on the market value of assets which are managed in pension funds and pension plans approved under Irish tax legislation.
  9. 9. Summary• Tax Relief available at marginal rate for pension contributions.• No longer need to buy an annuity so pension fund can become part of your estate.• You can switch pension funds if you are not happy with your present one.• Contact Barry Walsh on (086) 238 4225 if you have any further