Finance Act, 1958

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Approval of retirement benefits schemes.

34.—(1) Subject to section 35 of this Act, the Revenue Commissioners shall approve a retirement benefits scheme for the purposes of this Part of this Act if it is shown to their satisfaction that the scheme satisfies all the following conditions:

(a) that the scheme is established in connection with a trade or undertaking carried on wholly or partly in the State by a body corporate resident for income tax purposes therein;

(b) that the benefits afforded by the scheme may accrue only to—

(i) directors or employees of the body corporate on retirement, either on reaching a specified age (not exceeding seventy years) or on becoming permanently incapacitated at an earlier age, or

(ii) the widows, children or other dependants or the legal personal representatives of persons who are or have been directors or employees of the body corporate, on the death of such persons;

(c) that each person to whom the scheme relates has, under it, a specified right to defined benefits and has been made aware of the terms of the scheme;

(d) that the nature of the benefits afforded by the scheme is the same in relation to all the persons to whom the scheme relates;

(e) that not less than one-third of the cost of providing the benefits payable under the scheme, to or in respect of each of the persons to whom the scheme relates, is borne by the body corporate;

(f) that no sum paid by the body corporate for the purposes of providing benefits under the scheme may be applied to any other purpose or may be repaid to the body corporate;

(g) that, where any director or employee contributes to the cost of providing the benefits under the scheme, no sum so contributed by any person may be applied to any purpose other than the provision of those benefits or may be refunded to him;

(h) that—

(i) the aggregate value of all benefits which may accrue to any person on his retirement may not exceed the value, at the date of such retirement, of a pension for his life equal to one-sixtieth of his final remuneration multiplied by the number of his years of service, or the value, at such date, of a pension for his life equal to two-thirds of his final remuneration whichever is the lesser, and

(ii) the fraction of such aggregate value which may be represented by the value of the benefits, if any, given otherwise than by way of non-commutable pension or annuity does not exceed one-fourth;

(i) that the aggregate value of all benefits (in this subparagraph referred to as death benefits), which may accrue on the death during his service of any person, may not exceed the value of the benefits which might, consonant with the condition set forth in subparagraph (i) of paragraph (h) of this subsection, have been provided for him on retirement on attaining the specified age, if he had continued to serve until he attained that age at an annual rate of remuneration equal to his final remuneration, and that the value of all such death benefits which may be given otherwise than by way of non-commutable pension or annuity may not exceed whichever of the following amounts is the greatest:

(i) the sum of one thousand pounds,

(ii) an amount equal to the person's final remuneration,

(iii) an amount equal to one-thirtieth of the person's final remuneration multiplied by the number of his years of service or by forty-five, whichever is the lesser,

(iv) an amount equal to the aggregate of the sums contributed by the person under the scheme, together with reasonable interest on those sums;

(j) that—

(i) the aggregate value of all benefits which may accrue, on the death after his retirement of any person, may not exceed an amount equal to the aggregate value of the benefits to which that person became entitled on his retirement reduced by the total amount of all payments made or due up to such death in respect of such benefits, or

(ii) the only benefit which may accrue on the death after his retirement of any person is a non-commutable pension to his widow or other dependant of an amount not exceeding one-half of the pension or annuity to which that person had been entitled at the time of his death;

(k) that the pensions or annuities provided under the scheme are not assignable in whole or in part;

(l) that the scheme includes provision securing that no rights to any benefit provided or to be provided under the scheme (whether or not the accrual of the benefit is dependent on a contingency) shall be surrendered in whole or in part; and

(m) that no service of a person in whatever capacity while he is—

(i) a proprietary director,

(ii) a part-time director,

(iii) a proprietary employee, or

(iv) a part-time employee,

may be taken into account for any of the purposes of the scheme.

(2) The Revenue Commissioners may, if they think fit, having regard to the circumstances of the particular case, and subject to such conditions as they think proper to impose, approve a retirement benefits scheme for the purposes of this Part of this Act notwithstanding that one or more of the following paragraphs applies:

(i) the condition set out in paragraph (a) of subsection (1) of this section is not satisfied,

(ii) while the provision of benefits which may accrue only in the circumstances mentioned in paragraph (b) of that subsection is the principal purpose of the scheme, such provision is not its sole purpose,

(iii) the condition set out in paragraph (f) of that subsection is not satisfied because, if the amount of the sums paid by the body corporate for the purpose of providing benefits under the scheme in respect of any person or persons is in excess of the amount required to provide benefits in accordance with the scheme for such person or persons, a sum in relation to the excess may be repaid to the body corporate,

(iv) the condition set out in paragraph (g) of that subsection is not satisfied because sums contributed by a director or employee may be refunded to him (with or without reasonable interest thereon) on the cessation of his service in circumstances such that he does not become entitled to a pension payable either immediately or at some future date,

(v) in exceptional circumstances the aggregate value of the benefits which may accrue on the retirement of a director or employee may exceed the limit set out in subparagraph (i) of paragraph (h) of that subsection, or the value of such benefits which may be given otherwise than by way of non-commutable pension or annuity may exceed the limit set out in subparagraph (ii) of paragraph (h) of that subsection,

(vi) the aggregate value of the benefits which may be given, otherwise than by way of non-commutable pension or annuity, on the death during his service of any person may exceed the limit set out in paragraph (i) of that subsection,

(vii) the condition set out in paragraph (m) of that subsection is not satisfied in relation to a part-time director or part-time employee,

provided that the scheme otherwise satisfies the conditions set out in that subsection and that all payments under the scheme to persons to whom the scheme relates are payable by or through a person resident, for income tax purposes, in the State.

(3) Where the Revenue Commissioners have given their approval to a scheme, they may at any time, by notice in writing to the body corporate in question, withdraw their approval on such grounds, and as from such date (including a date before the date of the notice) as may be specified in the notice and where any approval is withdrawn under this subsection, such assessments as, having regard to section 32 of this Act, may be appropriate consequent upon the withdrawal shall thereupon be made.

(4) In the case of a scheme in existence on the commencement of this Part of this Act which does not then satisfy the conditions set out in subsection (1) of this section or which is not then a scheme which the Revenue Commissioners see fit to approve under subsection (2) of this section but which is so altered before the 6th day of April, 1960, or within such further time as the Revenue Commissioners may allow, as to be approvable under subsection (1) or subsection (2) of this section, approval thereof after the 6th day of April, 1959, shall, if the Revenue Commissioners so direct, be deemed to have had effect as from that day.