On 15 October 2013, the Minister for Finance introduced the Budget for 2014 (the "Budget"). Set out below is a summary of the changes introduced which relate to pensions.
The Pensions Levy
A new levy of 0.15% on the value of pension funds was introduced by Budget 2014. As this levy will come into effect from 1 January 2014, there will be an overlap between this levy, and the levy of 0.6%, which was introduced in 2011.
As the 0.6% levy is due to expire on 31 December 2014, a total levy of 0.75% will be payable from 1 January 2014 until 31 December 2014. The 0.15% levy will then continue to apply until 31 December 2015.
This new levy is effectively a reversal of the previously stated Government position that the pensions levy would end in 2014.
Decease in standard fund threshold
The standard fund threshold of an individual's pension fund is to be reduced from €2.3 million to €2 million from 1 January 2014. The capital valuation of a pension fund at this date will determine whether an individual has reached the standard fund threshold. Any amount in excess of the standard fund threshold is taxable. In addition, new capitalisation factors for the valuation of pension funds have...