PRSA - Small Amount

[ukpokerguy]

I'm due to complete contributions to a PRSA on my 60th birthday in 2 years time. At current projections its due to be worth approx 25k.

Is there a rule whereby the size of the account determines what my options are (small amount) or will I be committed to take out 25% tax free and then be forced to take the rest out as an annuity on the balance (circa 4% of 18k approx = €60 a month) ??

 

[kevhenry]

Correction: If you have a pension fund of less than €40k then you might qualify to claim your pension under the trivial pension option.

This would be applicable where, after taking your 25% tax free lump sum, that the remaining balance of your fund is below €30k then you may be in a position to take it all as a once off taxable payment.

You would be subject to income tax & USC on the value. Any calculation would need to incorporate any and all pension benefits you have.

Kevin
www.thepensionstore.ie

 

[ukpokerguy]

Hmmm...€60 a month it is then...lol

 

[Smoneen]

The triviality rule was updated earlier this year. The residual fund after taking tax free cash is now €30,000. The total/quantum of all benefits must be taken into account.

From the Revenue Pensions Manual Ch7.4:
“This may take place where the total of all funds available for pension benefits, following payment of any lump sum benefit, is less than €30,000. The quantum of retirement benefits from all sources must be taken into account for the purpose of calculating the €30,000 limit.”

If the PRSA is your only fund then you can aim for a final pot of €40,000. Take 25% tax free and balance as a taxable benefit under the triviality rule, assuming you have no other pension benefits.

 

[ukpokerguy]

Unfortunately I have a UK private pension arriving on my 60th birthday as well so as I said...€60 a month it is then