Pensions by Barry Walsh

1. Pensions Presentation
Waterford WEN
Barry Walsh Financial Services
Manor House
Cork Road
Waterford.
www.bwfs.ie
barry@bwfs.ie
(086) 238 4225

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. 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. 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. 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. 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. 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. 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. 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 questions.barry@bwfs.ie
www.bwfs.ie