Key Post Milestones to hit the Lifetime Pension Fund limit at age 60?

I'd agree, it's a relatively small group of people that this would impact. And in all likelihood, if some has amassed that kind of pension fund by early 50's then they are likely to have a lot of wealth outside of the pension too.


But in the hypothetical scenario, is retiring part of the pension the solution for the few that may hit the SFT in their early 50's?

For example, if someone at 50 has a pot of €1m and they have no desire to retire but will move jobs, should they retire the fund and convert it to an ARF?

Does this give them scope to contribute another €1m in contributions instead of the growth in the original fund "eating up" the remaining threshold?
The standard fund threshold only applies when funds are crystallised. So a 50 year old with €1m could change employers and take their 25% and out the balance into an ARF. This would use €1m of their SFT, any growth in the ARF is then irrelevant to their SFT and they have €1m of the threshold left to use with their new employees pension.
 
The standard fund threshold only applies when funds are crystallised. So a 50 year old with €1m could change employers and take their 25% and out the balance into an ARF. This would use €1m of their SFT, any growth in the ARF is then irrelevant to their SFT and they have €1m of the threshold left to use with their new employees pension.
And they can use the tax free lump sum to pay down debt.
 
Sorry if I've missed something, but what's the precise point in achieving the SFT limit so far ahead of retirement?

It seems to me to be a poor use of resources to aggressively build up a fund only to be forced to then leave it idle and not earning a cent for 10-15 years.
It’s a very valid tax planning strategy which we are using a lot with Professionals and business owners.

You pay an effective rate of tax of 71% on gains over the SFT but in post retirement your gains are only taxed to the extent that you pay income tax on imputed distributions.

So the goal is to get to €2m at age 50 and retire your pension which is tested against the SFT. No excess tax

You are not required to take any income from an ARF or vested PRSA until age 61 so the uplift between 50 and 61 is free from the excess tax charge.
 
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