Finance Bill 2024: pension impact

Finance Bill 2024 was released yesterday and contains important changes to pensions and the advice that you provide to your clients. It's important to note that whilst the changes have been announced, they are not in law until ratified through the Finance Act, which is usually close to the end of the calendar year. We are engaging with regulators to seek clarity on the effective date and the impact of these changes.

Whilst we were expecting the implementation of the recently announced SFT changes, we are very disappointed that the proposed changes to employer PRSA contributions will add further complexity for all of us.

In spite of this, as always, you are best placed to provide the right advice to your clients. We remain committed to providing you with the best technical support and information, tools to assist with advice, competitive Master Trust and PRSA products, the widest choice of high performing funds and efficient and responsive service. 

What was announced yesterday?

Employer contributions to PRSAs

• An employer limit of 100% of the director’s/employee’s remuneration in the current year.
• Employer PRSA contributions over this limit will be subject to BIK for the employee and may not be included by the employer as an expense.
• The employer limit is not subject to the earnings cap of €115,000.
• There is an allowance to use the prior year earnings where current year earnings are reduced due to sick leave and in some other limited circumstances.
• There is no proposal to include a funding check at the point of retirement for PRSAs.
• Employee and self-employed PRSA contributions continue to be subject to the existing limits of 15% - 40% of remuneration, subject to the earnings cap of €115,000.
• Employee contributions do not appear to count towards the employer limit of 100% of remuneration.

Standard Fund Threshold (SFT)

• There was no change to what had already been announced by the Minister in advance of the Budget. The SFT is to increase by €200,000 a year from 2026 until 2029.
• The capitalisation factors for DB benefits have not changed, but the Minister indicated that these would be reviewed in the future.
• You can find out more in our Standard Fund Threshold FAQ.

What do these changes mean for your clients?

For most clients the maximum funding rates that have always been available on company pensions provide sufficient opportunity to help clients meet their retirement goals.

While employer PRSA contributions have been reduced, they do still allow for higher contribution rates than were available pre-Finance Act 2022. PRSA clients currently paying in excess of the new Finance Act 2024 limits will need your support and advice to review their pension funding needs.

How will we support you?

Our role is to make sure that we provide you with a value adding proposition to support you, including a full range of Master Trust and PRSA products.

Our market leading MyRevMax calculator will help simplify maximum funding calculations for your clients. 

• Learn about the benefits of this unique tool.

Your account manager and the Brokerage Pension Team are here to support you and will continue to keep you informed of any updates and changes.