The Finance Bill 2024 published today and it includes a number of proposed pension changes:

Proposed Pension Changes: 

PRSAs

A new “employer limit” will apply to employer contributions to an employee’s PRSA.

The employer limit has been defined as 100% of an employee’s total income.

Employers will only be entitled to claim tax relief on contributions up to the new employer limit.

Employees will be liable to BIK on employer contributions above the new employer limit.

Transfers from PRSAs to Vested PRSAs are considered a benefit crystalisation event.

SFT

The SFT is to be increased in line with the recommendations set out in the recent Department of Finance report.

  • Increased to €2.2M in 2026
  • Increased to €2.4M in 2027
  • Increased to €2.6M in 2028
  • Increased to €2.8M in 2029

From 2030 onwards the SFT will be increased in line with the Earnings, Hours and Employment Cost Survey.

The legislative link between SFT and the maximum retirement lump sum will no longer apply, the standard chargeable amount will be set at €500,000 less the tax-free amount (currently €200,000)

Auto-enrolment

Tax treatment of the Auto-enrolment (AE) Scheme:

  • Employer contributions to AE will be exempt from tax
  • Income and gains (if any) of the AE fund will be exempt from tax
  • Amounts paid from the AE scheme (after the retirement lump sum) will be taxed

The Bill will now need to go through the various review and approval stages before it is enacted

How we help

As a Financial Planning / Advisor Firm in Louth we are available to discuss any and all queries that you may have in relation to the Budget Changes. Arrange a meeting by clicking this link to my Calendly Diary, emailing info@smartfinance.ie or calling 087 8144 104.

Smart Finance Life Planning Ltd., Bawntaaffe, Monasterboice, Drogheda, Co. Louth. A92 E2V3.