Finance Act 2013
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Retirement benefits. |
17.— (1) Chapter 1 of Part 30 of the Principal Act is amended— | |
(a) in section 770(3) by substituting “Schedules 23 and 23C” for “Schedule 23”, | ||
(b) in section 772 by inserting the following after subsection (3H): | ||
“(3I) A retirement benefits scheme shall not cease to be an approved scheme where the trustees of the scheme, notwithstanding anything contained in the rules of the scheme as approved, allow a member or, as the case may be, where the scheme is subject to a pension adjustment order, the spouse or former spouse or civil partner or former civil partner of the member, to avail of an option in accordance with section 782A.”, | ||
and | ||
(c) by inserting the following section after section 782: | ||
“Pre-retirement access to AVCs. | ||
782A.— (1) (a) In this section— | ||
‘accumulated value’, in relation to relevant AVC contributions, means— | ||
(i) where the contributions are contributions of a kind referred to in paragraph (i) of the definition of ‘relevant AVC contributions’, the amount which the administrator determines to be equal to the realisable value of the portion of the resources of the scheme that, in accordance with the rules of the scheme, represents those contributions, less the amount of so much of the expenses of the scheme as, under the rules of the scheme, are to be discharged out of that portion, and | ||
(ii) where the contributions are contributions of a kind referred to in paragraph (ii) of the definition of ‘relevant AVC contributions’, the amount which the PRSA administrator determines to be equal to the realisable value of the resources of the PRSA contract that, in accordance with the terms of the contract, represents those contributions, less the amount of the expenses of the contract as, under the terms of the contract, are to be discharged out of the realisable value; | ||
‘administrator’, in relation to an AVC fund, means the person or persons having the management of the scheme to which the relevant AVC contributions comprising the AVC fund have been made or, as the case may be, the PRSA administrator; | ||
‘AVC fund’ means the accumulated value of relevant AVC contributions made by a member, other than the accumulated value of relevant AVC contributions of a kind referred to in paragraph (ii) of the definition of that term where benefits have become payable to the member under the main scheme; | ||
‘designated benefit’ and ‘pension adjustment order’ have the meanings assigned to them in section 787O(5)(a); | ||
‘member’, in relation to a scheme, means any person who, having been admitted to membership under the rules of the scheme, remains entitled to any benefit under the scheme; | ||
‘PRSA administrator’ has the meaning assigned to it in section 787A(1); | ||
‘relevant AVC contributions’ means— | ||
(i) additional voluntary contributions within the meaning of section 770(1), and | ||
(ii) additional voluntary PRSA contributions within the meaning of section 787A(1), | ||
made for the purpose of providing relevant benefits on retirement and include such additional voluntary contributions representing a transfer of additional voluntary contributions from a retirement benefits scheme or a PRSA, as the case may be, but shall not include such additional voluntary contributions made under a purchase of notional service scheme; | ||
‘relevant individual’ means a member of a scheme who has an AVC fund and, as the case may be, where the AVC fund is subject to a pension adjustment order includes the spouse or former spouse or civil partner or former civil partner of the member; | ||
‘scheme’ means an approved scheme or a statutory scheme; | ||
‘specified period’ means the period of 3 years from the date of passing of the Finance Act 2013. | ||
(b) For the purposes of this section, where an AVC fund is subject to a pension adjustment order, each relevant individual shall be deemed to have a separate AVC fund the value of which shall be determined as if the designated benefit pursuant to the order was payable at the time of the transfer provided for in subsection (3). | ||
(c) For the purposes of this section, relevant AVC contributions shall not include— | ||
(i) any sum paid by means of contribution, howsoever described, at any time by an employer (within the meaning of section 787A) to a scheme or to a PRSA, | ||
(ii) contributions (which are not voluntary contributions) made at any time by a member to a scheme at the rate or rates specified for member’s contributions in the rules of the scheme or otherwise, or | ||
(iii) contributions (which are not additional voluntary contributions of a kind referred to in subparagraph (ii) of the definition of ‘relevant AVC contributions’) made at any time by a member to a PRSA. | ||
(2) Notwithstanding section 32 of the Pensions Act 1990 or the provisions of a pension adjustment order made in relation to a relevant individual, a relevant individual may during the specified period irrevocably instruct in writing the administrator of his or her AVC fund to exercise, on one occasion only, the option (in this section referred to as the ‘pre-retirement access option’) provided for in subsection (3). | ||
(3) The pre-retirement access option is the transfer by the administrator to the relevant individual, before retirement, of an amount not exceeding 30 per cent of the value, at the time of the transfer, of the relevant individual’s AVC fund. | ||
(4) (a) The amount transferred by an administrator to a relevant individual in accordance with subsection (3) shall, notwithstanding section 780, be treated as a payment to the individual of emoluments to which Schedule E applies and accordingly the provisions of Chapter 4 of Part 42 shall apply to any such payment, and | ||
(b) the administrator shall deduct tax from the amount transferred at the higher rate for the year of assessment in which the payment is made unless the administrator has received from the Revenue Commissioners a certificate of tax credits and standard rate cut-off point or a tax deduction card for that year in respect of the individual. | ||
(5) Where an administrator receives an irrevocable instruction referred to in subsection (2) the administrator shall keep and retain for a period of 6 years each such instruction and on being so required by notice given to the administrator in writing by an officer of the Revenue Commissioners make available within the time specified in the notice such instructions as may be required by the notice. | ||
(6) Where a pre-retirement access option is exercised in respect of a relevant individual in accordance with subsection (3) the amount transferred shall not be a benefit crystallisation event (within the meaning of section 787O(1)) for the purposes of Chapter 2C and Schedule 23B.”. | ||
(2) Chapter 2 of Part 30 of the Principal Act is amended— | ||
(a) in subsection (2) of section 784C by substituting the following for all of the words from and including “shall be the lesser of” to the end of that subsection: | ||
“shall be the lesser of— | ||
(i) the amount referred to as A in that formula, and | ||
(ii) €63,500.”, | ||
(b) in section 784C(3) by substituting the following for paragraph (b): | ||
“(b) €63,500.”, | ||
and | ||
(c) in section 784C(4) by substituting the following for paragraph (a): | ||
“(a) Where, at the date of exercise of an option under section 784(2A), the individual by whom the option is exercised is in receipt of specified income amounting to €12,700 per annum, the amount referred to as B in the formula in that section shall be nil.”. | ||
(3) Chapter 2A of Part 30 of the Principal Act is amended in section 787K by inserting the following after subsection (2B): | ||
“(2C) A PRSA product (within the meaning of Part X of the Pensions Act 1990 ) approved under section 94 of that Act, shall not cease to be an approved product where, notwithstanding anything contained in the terms of the product as approved, the PRSA administrator makes an amount available from the PRSA assets to the PRSA contributor or, as the case may be, where the PRSA is subject to a pension adjustment order, to the spouse or former spouse or civil partner or former civil partner of the PRSA contributor (in this subsection referred to as the ‘relevant individual’) on foot of the relevant individual availing of an option in accordance with section 782A.”. | ||
(4) (a) Schedule 23 to the Principal Act is amended in Part 1 by inserting the following after paragraph 2B: | ||
“Information to be provided in respect of pre-retirement access to additional voluntary contributions | ||
2C. (1) An administrator (within the meaning of section 782A(1)(a)) shall, within 15 working days of the end of each quarter commencing with the quarter ending on 30 June 2013, deliver to the Revenue Commissioners, by such electronic means as are required or approved by the Commissioners, the following information in respect of amounts transferred under section 782A during the quarter— | ||
(a) the number of transfers made, | ||
(b) the aggregate value of the transfers made, and | ||
(c) the tax deducted from the aggregate value of the transfers made. | ||
(2) In this paragraph ‘quarter’ means a period of 3 consecutive months ending on 31 March, 30 June, 30 September or 31 December.”. | ||
(b) The Principal Act is amended by inserting the following Schedule after Schedule 23B: | ||
“Part 30, Chapter 1 | ||
SCHEDULE 23C | ||
Pre-retirement access to PRSA AVCs Information to be provided in respect of pre-retirement access to additional voluntary PRSA contributions | ||
1. An administrator (within the meaning of section 782A(1)(a)), who is a PRSA administrator (within the meaning of that provision), shall, within 15 working days of the end of each quarter commencing with the quarter ending on 30 June 2013, deliver to the Revenue Commissioners, by such electronic means as are required or approved by the Commissioners, the following information in respect of amounts transferred under section 782A during the quarter— | ||
(a) the number of transfers made, | ||
(b) the aggregate value of the transfers made, and | ||
(c) the tax deducted from the aggregate value of the transfers made. | ||
2. In this Schedule ‘quarter’ means a period of 3 consecutive months ending on 31 March, 30 June, 30 September or 31 December.”. | ||
(5) Paragraph (f) of subsection (2) of section 19 of the Finance Act 2011 shall be deemed to have had effect on and from 6 February 2011 as if paragraph (c) of section 19(7) of that Act had never applied to the said paragraph (f). | ||
(6) (a) In this subsection— | ||
“approved minimum retirement fund” has the meaning assigned to it by section 784C(1) of the Principal Act; | ||
“non ring-fenced amount”, in relation to a vested PRSA, means the amount or value of assets in the vested PRSA that the PRSA administrator can make available to, or pay to, the PRSA contributor or to any other person; | ||
“Personal Retirement Savings Account”, “contributor” and “PRSA administrator” have the meanings assigned to them by section 787A(1) of the Principal Act; | ||
“relevant option” means an option exercised in accordance with section 772(3A)(a), 784(2A) or 787H(1) of the Principal Act; | ||
“ring-fenced amount”, in relation to a vested PRSA, means an amount retained within the vested PRSA by the PRSA administrator equivalent to the amount which the PRSA administrator would, if an option had been exercised in accordance with section 787H(1) of the Principal Act, have had to transfer to an approved minimum retirement fund in accordance with section 784C and by virtue of section 787H(3) of that Act; | ||
“specified income” has the meaning assigned to it by section 784C(4)(b) of the Principal Act; | ||
“vested PRSA” means a Personal Retirement Savings Account in respect of which assets have first been made available to, or paid to, the contributor by the PRSA administrator on or after 6 February 2011, and the term “vesting of a PRSA” shall be construed accordingly. | ||
(b) Where on or after 6 February 2011 and before the date of passing of this Act one or more than one relevant option is exercised by an individual, or an individual has one or more than one vested PRSA, and in the exercise of the relevant option or options or in the vesting of the PRSA or PRSAs, an amount or value of assets is transferred to an approved minimum retirement fund (by way of one or more than one transfer) or, as the case may be, is a ring-fenced amount (in this paragraph referred to as the “relevant amount”, and where this term is used in the context of a ring-fenced amount it shall, where there is more than one ring-fenced amount, be construed as meaning the aggregate of the ring-fenced amounts), then where the individual— | ||
(i) has specified income of not less than €12,700 on or after the date of passing of this Act— | ||
(I) the approved minimum retirement fund shall thereupon become an approved retirement fund (in respect of which section 784A and subsections (1) and (5) of section 784B of the Principal Act shall accordingly apply), or | ||
(II) the ring-fenced amount or, as the case may be, each ring-fenced amount shall thereupon become a non ring-fenced amount, | ||
or | ||
(ii) has specified income of less than €12,700 on the date of passing of this Act in circumstances where the relevant amount is greater than €63,500— | ||
(I) the approved minimum retirement fund shall, to the extent of the excess of the relevant amount over €63,500, thereupon become an approved retirement fund (in respect of which section 784A and subsections (1) and (5) of section 784B of the Principal Act shall accordingly apply), or | ||
(II) the ring-fenced amount or, as the case may be, so much of each ring-fenced amount determined in accordance with paragraph (c) shall, to the extent of the excess of the relevant amount over €63,500 thereupon become a non ring-fenced amount. | ||
(c) For the purposes of giving effect to paragraph (b)(ii)(II), where more than one vested PRSA has a ring-fenced amount the individual shall determine how much of each ring-fenced amount shall become a non ring-fenced amount. | ||
(7) (a) Subsections (1), (3), (4), (5) and (6) have effect from the date of passing of this Act. | ||
(b) Subsection (2) shall apply as respects the exercise of an option in accordance with section 772(3A)(a), 784(2A) or 787H(1) of the Principal Act on or after the date of passing of this Act. |