Prior to 7th December 2010 a tax charge was imposed at retirement on the excess value of your pension over €5.4 million. This is known as the SFT or Standard Fund Threshold. After 7th of December 2010 this threshold was reduced to €2.3 million. Its important to remember if your fund is over €2.3 million the excess will be liable to tax at 41%.

The current €2.3 million figure is important as if you retire and draw down your pension. Anything over the €2.3 is liable to income tax at 41% and USC or Universal Social Charge of 7%.

Grandfathering Rules

If your fund was over the original €2.3 million on the 7th of December 2010 you could apply by way of application for a PFT or Pension Fund Threshold to the Revenue up to a maximum of the original €5.4 million.

Our Opinion

• We dont believe its "best advise" to continue funding into your pension once you reach the €2.3 million threshold.
• If your fund is less that €2.3 million it still make sense to fund up to the limit (€2.3 million)
• We can help you if you are an employer as you should look to advise your staff on the many changes in pension legislation which we are witnessing.
• If you want a fresh review of your existing pension, please call us and we will give you our independent opinion.