The maximum allowable pension fund on retirement for tax purposes known as the Standard Fund Threshold (SFT) is to be set at €2.3 million as on and from 7 December 2010. This compares with an SFT of just over €5.4 million that applied before the Budget.

Individuals with pension rights whose capital value exceeds this lower SFT on Budget Day will be able to protect that higher capital value by claiming a Personal Fund Threshold (PFT).

A PFT may apply if, on 7 December 2010, the capital value of an individual’s pension rights drawn down on or after 7 December 2005 (i.e. crystallised pension rights), if any, when added to any uncrystallised pension rights the individual may have, as valued on 7 December 2010 (i.e. pension rights which the individual is building up but has not yet become entitled to) is greater than €2.3 million. However, in no case may a PFT exceed the level of the previous SFT of €5,418,085.