Probe into firms that offer access to pension before retirement age

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THE tax authorities are to investigate a sudden upsurge in companies claiming they can help cash-strapped workers release money early from their pension funds.
Millions of euro is locked in pension funds and cannot be accessed at a time when people need funds to pay down debts, fund new businesses or pump money into a cash-starved firm.
The earliest someone can get their hands on pension money is 50, if they are self-employed and retire, with most others having to wait until they are 60 and no longer working.
The Irish Brokers Association (IBA) has proposed a change in the law to allow people to get immediate access to pension fund money, under certain conditions. The proposal has been championed by Fine Gael TD Mary Mitchell O'Connor.
Such a scheme had the potential to unleash €1.5bn in funds and dig 50,000 distressed borrowers out of financial trouble, the IBA said.
The Government has dismissed that idea as it would discourage people from putting money aside for old age.
Now at least four companies have started offering to release retirement funds by routing money through Britain, the Irish Independent has learned.

Transfers
Other advisers are claiming they can get people early access to pension money by transferring Irish pensions funds to the UK and then on to New Zealand.
One company that has been advertising in a national newspaper that it will get people access to 50pc of their pension at any age said what it was doing was entirely above board.
Bosses at Anthony James Hall, which has offices in Santry, Dublin, would not answer questions about whether or not it was regulated here or is registered with the Companies Office.
The tax authorities said: "Revenue has recently become aware of companies advertising mechanisms that will allegedly enable people to gain early access tax-free from their pension funds by transferring the pension fund abroad. The matter is being investigated."
Pensions ombudsman Paul Kenny is understood to have sent a memo to the Department of Social Protection, the Central Bank and the Revenue Commissioners about the emergence of companies offering to gain people early access to pensions money.
Previous attempts by pensions firms to bypass pensions rules here by transferring pension money to the UK were blocked by the Government.
- Charlie Weston Personal Finance Editor

If Irish people were allowed to access the money they themselves have paid into their pension funds..they would not have to use these types of companies. I believe Irish people should be allowed to draw down the money they have paid into their pensions if they find themselves in severe financial hardship.

Ann1 said:

If Irish people were allowed to access the money they themselves have paid into their pension funds..they would not have to use these types of companies. I believe Irish people should be allowed to draw down the money they have paid into their pensions if they find themselves in severe financial hardship.

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I'd agree Ann. There should be a strict list drawn up of circumstances under which early access can be granted. There is such a list at present, but it contains only one item - ill-health.

If this list was extended, I think it would encourage more people to make provision for their retirement, particularly younger people who are reluctant to lock up their fund for 30 - 40 years.

And ill-heatlh is quantifiable in that it depends on how ill the person is, as in my circumstances. It is estimated that I have perhaps 6 years (could be more, could be less) to live but is all I can get is an enhanced annuity which means that when I die, I will be leaving the pension company much of my fund.