Protecting Your SsaSets 01.07.10

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Presentation on managing the risks to your pension fund

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Protecting Your SsaSets 01.07.10

  1. 1. Protecting your SSASets Aidan McLoughlin BCL Solr FITI TEP AIIPM Managing Director Independent Trustee Company
  2. 2. Agenda <ul><li>Introduction </li></ul><ul><li>Recent Developments </li></ul><ul><li>Background </li></ul><ul><li>Planning Opportunities </li></ul>
  3. 3. Threats to Pensions <ul><li>Fall in Investment Values </li></ul><ul><li>Reduction in tax reliefs </li></ul><ul><li>Extension of retirement ages </li></ul><ul><li>Collapse of Banks and the consequent impact on deposits </li></ul><ul><li>The Quinn Insurance affair and its impact on insured pensions </li></ul><ul><li>Developments in Family Law </li></ul><ul><li>Brendan Murtagh case </li></ul>
  4. 4. Tax Relief Restrictions <ul><li>Allowance for self employed reduced from €275k to €150k </li></ul><ul><li>Income levies </li></ul><ul><li>High Earner restriction </li></ul><ul><li>PRSI on ARF drawdowns </li></ul><ul><li>Insurance Levies </li></ul><ul><li>33% tax relief rate </li></ul>
  5. 5. National Pensions Framework <ul><li>33% tax rate </li></ul><ul><li>Auto –enrolment – contributions and benefits administered by Revenue? </li></ul><ul><li>Extension of retirement age </li></ul><ul><ul><li>Impact on ARF </li></ul></ul>
  6. 6. Deposits <ul><li>Bank Guarantee </li></ul><ul><ul><li>Investment pre- September 2010 </li></ul></ul><ul><ul><li>Term Deposit </li></ul></ul><ul><li>Deposit Guarantee </li></ul><ul><ul><li>€ 100k </li></ul></ul><ul><ul><li>Self Administered Schemes only </li></ul></ul><ul><ul><li>Aggregation? </li></ul></ul>
  7. 7. Insured Pensions <ul><li>Irish Life & Anglo </li></ul><ul><li>Quinn Insurance </li></ul><ul><li>Assets on Balance Sheet </li></ul><ul><li>Solvency of Insurers </li></ul><ul><li>Diversify or avoid? </li></ul>
  8. 8. Family Law developments <ul><li>Pension Adjustment Orders </li></ul><ul><ul><li>Revisit on divorce </li></ul></ul><ul><li>ARFs </li></ul><ul><ul><li>Property adjustment orders? </li></ul></ul><ul><li>Civil Partnership Act </li></ul>
  9. 9. Brendan Murtagh case <ul><li>Receiver appointed re ARF </li></ul><ul><li>No published Judgement </li></ul><ul><li>Degree to which the issues was defended </li></ul><ul><li>Market Concern </li></ul>
  10. 10. Background <ul><li>OPS </li></ul><ul><ul><li>Section 774 – under “irrevocable trust” </li></ul></ul><ul><ul><li>Section 772 – “ no pension is capable in whole or in part of surrender, commutation or assignment” </li></ul></ul><ul><ul><li>NOTE: Buy-out Bonds </li></ul></ul>
  11. 11. Background <ul><li>Personal Pension </li></ul><ul><ul><li>An insurance contract – not under trust </li></ul></ul><ul><ul><li>Section 784 – must include “provision securing that no annuity payable under it shall be capable in whole or in part of surrender, commutation or assignment” </li></ul></ul><ul><li>Note: Group Schemes </li></ul>
  12. 12. Background <ul><li>PRSA </li></ul><ul><ul><li>contract not a trust </li></ul></ul><ul><ul><li>Section 787K – PRSA must include “ provision securing that no annuity payable under it shall be capable in whole or in part of surrender, commutation or assignment” </li></ul></ul><ul><ul><li>Section 92 Pensions Act – “ No legal or equitable charge may subsist over the PRSA assets” </li></ul></ul>
  13. 13. Background <ul><li>ARFs </li></ul><ul><ul><li>Legal status not defined in legislation </li></ul></ul><ul><ul><li>Client is clearly the beneficial owner </li></ul></ul><ul><ul><li>Original ARFs involved direct tax payment by owner </li></ul></ul>
  14. 14. Planning <ul><li>Move towards higher protection </li></ul><ul><ul><li>Occupational pension scheme </li></ul></ul><ul><ul><li>SSAS v Insured </li></ul></ul><ul><li>Switch of Employer </li></ul><ul><li>Waiver of benefits under pension scheme </li></ul><ul><li>Addition of new members to dilute benefits </li></ul><ul><li>Pension/property adjustment order </li></ul><ul><li>Use of Unit Trust Structure in ARFs and PRSAs </li></ul>
  15. 15. Planning <ul><li>Multiple pensions </li></ul><ul><li>Annuity purchase </li></ul><ul><li>Investment in Tracker Funds/Private Equity </li></ul><ul><li>Create transfer/ distribution system </li></ul><ul><li>Invest in AMRF </li></ul><ul><li>Move pension overseas </li></ul>
  16. 16. Questions? Independent Trustee Company is regulated by the Financial Regulator

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