Report - Pension SFT increase coming

Saw this in the IT editorial re lump sums, didn’t see it in thread “According to McGrath’s successor Jack Chambers, the upcoming Finance Bill will also provide for the threshold for the higher rate of taxation to apply to a pension lump sum be set at €500,000 rather than a proportion of the SFT.
 
Bluefin said:
Based on the other thread in relation to CAT and inheritance, is the tax breaks being given to people with large pension pots a good use of scarce resources?
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In my view yes. It helps prevent Brain Drain and encourages 'Brain Gain' if you like.

Ireland is an absolutely terrible place to be an investor and one of the few tax advantages normal people can strive for is a good pension pot.

I would be gone from this country in a heartbeat if I didn't have the possibility of a good retirement fund.
 
It’s ‘the people who get up early in the morning’ who keep this show on the road. High earners pay the bulk of income tax. Mega corporates pay the bulk of corporation tax. The tax breaks given to high earners are a small thank you for covering the bills that the whingers would do well to remember.
 
Could anybody with the know how please show what salary would be required for a 2.8 mil pension pot in a final salary full service public sector pension scheme?
 
First of all, there is no pension pot at all.
All public pensions, like public payrolls, are paid from current taxes

The pension pot is a notional calculation for public servants

An early post estimated it at € 100k pa
 
jpd said:
First of all, there is no pension pot at all.
All public pensions, like public payrolls, are paid from current taxes

The pension pot is a notional calculation for public servants

An early post estimated it at € 100k pa
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Remember that Gardaí retire on a full pension after 30 years. That makes their pension considerably more valuable. I can't find the link but I read before that it's about 50% of their income so a Garda on €80k a year (around the average) is getting a package worth €120k a year.
 
Fibbernacci said:
In my view yes. It helps prevent Brain Drain and encourages 'Brain Gain' if you like.

Ireland is an absolutely terrible place to be an investor and one of the few tax advantages normal people can strive for is a good pension pot.

I would be gone from this country in a heartbeat if I didn't have the possibility of a good retirement fund.
Click to expand...
We don't need brain-gains like Fingers Fingleton building up a 30m pension pot. In the private sector the type of people that build up crazily high pension pots are brass-necked and brass-brained highly paid bluffers in financial services. And the usual reason that sort of fund went so high is because the company had a DB pension with no salary limit and no common sense.

High paid private sector workers in productive parts of the economy usually don't have DB pensions and aren't as interested in the limits as the top staff in the DoF.

With a multimillion pension in Ireland you're going to be paying mostly high tax on drawdown from the pension and you can only draw it down in ways the DoF allow. Apart from tax free lump sum moving the various limits further up doesn't help that drawdown level of tax.

There are reasons you'd self limit before hitting official limits and invest elsewhere, in an ideal world most DC pensioners would prefer a balance of pension and non-pension wealth. (For example - anyone less than ~40 it's likely the government will eventually raise the private pension access age from 50 - so don't have all your eggs in one basket if you've one eye on early retirement)

My own suggestion for helping all levels of pension fund contributors not just the hard pressed senior staffers in the DoF - would be reintroduce relief for PRSI.
 
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