Finance (No.2) Bill 2026 Update

The Finance (No. 2) Bill 2026 was published Monday, 19 October 2026. There are a couple of items of interest for pensions.

The Bill doesn’t include new capitalisation factors for use by DB schemes in Standard Fund Threshold calculations. Minister Harris had said in his Budget speech that new capitalisation factors would come into effect from 1 January 2027 and that these would be set out in the Finance Bill.

We will try to clarify with Dept of Finance if they still intend to publish new capitalisation factors before the Bill is signed into law in December, or if this change has been dropped for now.

The Finance Bill updates the wording of redundancy lump sum/termination payment legislation. The definition of lump sums to be included as part of a tax calculation on a termination payment is updated to cover tax free lump sums from pension arrangements relating to the relevant employment, including occupational pension schemes/Master Trusts, PRBs, PRSAs, Personal Pensions, AE/MFF, Pan-European Personal Pensions and qualifying overseas pension plans (as defined). The Dept of Finance explanatory memo says that this ensures that termination payment legislation continues to operate as intended.

We will continue to monitor the Finance (No. 2) Bill as it progresses through the Oireachtas for any items that may impact pension arrangements. We also continue to await the publication of the Pensions (Amendment) Bill which may potentially include updates to Pensions Act legislation and transfers.