2013 budget pension measure falls €75m short

The budget measure allowing early drawdown of additional voluntary contribution pensions generated €25m in 2013 compared with a Government expectation of €100m.

The move was aimed at releasing extra cash into the economy in an effort to stimulate domestic demand. Under the proposal, individuals would be allowed a once-off option to withdraw up to 30% of the value of funded additional voluntary contribution made to supplement retirement benefits.

The €25m figure emerged following a parliamentary question by Fianna Fáil TD Michael McGrath.

Michael Noonan, the finance minister, said: “Finance Act 2013 provides members of occupational pension schemes with a three-year window of opportunity from March 27, 2013, during which they can opt to draw down, on a once-off basis, up to 30% of the accumulated value of additional voluntary contribution.

“This provision includes additional voluntary contributions made to personal retirement savings accounts (PRSAs).

“Administrators of additional voluntary contribution funds (including PRSA administrators) are required to provide, within 15 working days of the end of each quarter, commencing with the quarter ending on June 30, 2013, certain statistical information to Revenue in relation to additional voluntary contribution and PRSA pre-retirement transfers or encashments made during the quarter in question.”

The tax deducted from aggregate value of transfers made for the quarters last year ending June 30, September 30, and December 31 was €25,763,157, according to the Department of Finance.

There is no update available for 2014, as the statistical information for the quarter ended March 31 is not required to be submitted until this month.

Mr McGrath also asked how much revenue had been raised through the pension levy in 2013,

Mr Noonan said: “I am informed by the Revenue Commissioners that the estimated revenue raised from this levy in 2013 amounted to €535.3m.”