Changes to PRSA funding limits

Gordon Gekko said:
But what about inflation? €2m in 2014 isn’t the same now.
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This is a real issue with non-indexation. One of the bodies reporting on this before the recent change pointed out that the SFT needed to be closer to €3m today to match 2014 purchasing power. The raise to €2.8m by the end of the decade will therefore still be lower in real terms, given we expect inflation of around 2% per year.

However, every time the government goes to make a change it’s all “gold plated pensions” and “tax cuts for millionaires”, not to mind the work that often goes into building a pension pot.

I daresay they wouldn’t have touched the SFT at all but for the way it is impacting senior public sector appointments.

Life would go easier if this stuff was indexed, but then stealth tax rises would be a lot more difficult and on the side of other taxes politicians couldn’t parade the “cuts” they’re giving us each year, even if they’re essentially neutral compared to inflation.
 
C_Pike said:
This is a real issue with non-indexation. One of the bodies reporting on this before the recent change pointed out that the SFT needed to be closer to €3m today to match 2014 purchasing power. The raise to €2.8m by the end of the decade will therefore still be lower in real terms, given we expect inflation of around 2% per year.

However, every time the government goes to make a change it’s all “gold plated pensions” and “tax cuts for millionaires”, not to mind the work that often goes into building a pension pot.

I daresay they wouldn’t have touched the SFT at all but for the way it is impacting senior public sector appointments.

Life would go easier if this stuff was indexed, but then stealth tax rises would be a lot more difficult and on the side of other taxes politicians couldn’t parade the “cuts” they’re giving us each year, even if they’re essentially neutral compared to inflation.
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Indexation should equally apply to inheritance tax thresholds and CGT rates…principal is identical
 
cally1990 said:
Can someone explain the year of assesment for proprietary directors with this ?

Proprietary directors are taxed like employees under the PAYE system where the employer deducts taxes at source Via the Rpn when operating payroll

So it needs to be monitored in real time for BIK to actually be applied

Eg

let's say a director in 2024's company has 100k in sales invoices
Gross Salary taken :50k
Employer pension contributions to prsa :50k

In 2025, is the new rule saying the maximum limit is 50k (based on the salary from the previous year)

OR

Is it 100% limit of whatever is taken as salary per week/biweekly/monthly in 2025 in real time?

Eg

if a director takes salary of 4000 a month in 2025, is the max employee contribution 4000k to match?

OR

Salary of 4k and

Employer prsa limit of 4166(50k/12 months) because that was the salary in 2024?
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I think it would be wise for an employer (or the director) to only allow matching of their pension to the salary taken. There is always the risk that employment is lost/ill/death which could leave an unnecessary BIK bill.
 
Savvy said:
I think it would be wise for an employer (or the director) to only allow matching of their pension to the salary taken. There is always the risk that employment is lost/ill/death which could leave an unnecessary BIK bill.
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Noted, Thank you
 
Hi all

Are the executive pensions/master trust exempt from the changes that are coming ?

I know it effects employer contributions to prsas

but does the executive pension /master trust fall under Pan-European Personal Pension Product (PEPP) or are these type of pensions completely separate /different ?
 
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