The Sinn Fein manifesto included a proposal to reduce the standard fund threshold from €2m to €1.2m.
What will be the implications of that for public servants?
Brendan
Absolutely.Dropping it to €1.2 would pull in a lot more people
Guess it depends on what you see as the purpose of tax relief on pension contributions. If the purpose is to help you be financially successful, then just lowering income tax would be better for you and the economy (you'd have more disposable income that you could get out and spend right now). Assuming the purpose is only to encourage you to build up a sufficient pension provision so you will not be a burden on the state and other tax payers, then it makes sense to limit the tax relief to the point that you will have enough to survive without being a burden, but little more than that.€1.2m in 30-40 years time might not be very big.
Seems these polices limit how successful you can be financially.
The Sinn Fein manifesto included a proposal to reduce the standard fund threshold from €2m to €1.2m.
The Greens proposal is to limit tax relief on pension contributions once sufficient funds have been accumulated to provide a pension of €48k pa (ballpark €1.2m).
You do alright when you earn the average wage but if you succeed and earn good money, you'll be taxed to the hilt. Given the top tax rate is already 52% (55% if self employed and earn over €100k), increasing taxation further will act as a disincentive and reduce competitiveness in the market. We will also see the top talent leave the country. It is already happening in the medical profession.
What will be the implications of that for public servants?
Brendan
20 times pension plus 1.5 times Salary lump sum gives the Revenue valuation. €1.2m would be a PS salary of €104k with full service I.e. a pension of 52k.
Table 9.4 Distribution of annual gross earnings Public Sector Permanent Full-time Employees aged 25-59 | ||||
Percentile | 2015 | 2016 | 2017 | 2018 |
10th | €28,282 | €28,204 | €27,629 | €28,113 |
20th | €34,180 | €33,897 | €33,979 | €34,861 |
30th | €38,319 | €37,497 | €37,724 | €38,731 |
40th | €42,933 | €42,258 | €42,251 | €42,681 |
50th | €47,934 | €46,445 | €47,306 | €47,713 |
60th | €53,007 | €51,578 | €52,189 | €53,388 |
70th | €57,971 | €56,496 | €58,185 | €58,906 |
80th | €64,048 | €62,163 | €64,143 | €65,980 |
90th | €72,662 | €71,086 | €73,867 | €77,134 |
The fixed-valuation factor of 20:1 only relates to pre-2014 service.That 20 times pension was based on typical annuity rates when they were setting the 2m threshold
Age-related factors for post-2014 service range from 37:1 for those who retire at 50 (or under) to 22:1 for those that retire at 70 (or over). The factor at 60 is 30:1 and at 65 is 26:1.
True but pre-2014 is the majority of existing public employees and almost all public employees who'll be retiring in the next 10-20 years.The fixed-valuation factor of 20:1 only relates to pre-2014 service.
Schedule 23B TCAWhere can one find these factors?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?