Pension Question - Lump Sum Tax Free

What is the situation in relation to Lump Sum Tax Free Pension payment to person who retires after 47 years work.

He is entitled to two different pensions. He has been told that, due to Revenue Rules, he can only receive a maximum of 150% of his final year salary as a lump sum tax free payment. Is this true?

eg if his Salary was €20,000 then the most he could receive tax free would be €30,000 in total all together.. With the rest paid each month.

Any advice greatly appreciated.

sam27 said:

He is entitled to two different pensions.

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Can you provide a bit more detail? Two different employments? Were they Public Sector or Private Sector jobs? Defined Benefit or Defined Contribution pensions?

sam27 said:

He has been told that, due to Revenue Rules, he can only receive a maximum of 150% of his final year salary as a lump sum tax free payment. Is this true?

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There are a couple of ways of calculating the tax-free lump sum element of a pension entitlement. One method is 150% of final salary. Another is 25% of his pension fund. Not all pension schemes can avail of the second method.