Brokers call for PRSAs to be tax-free

Insurance brokers have called on the Government to make PRSA payouts completely tax-free on maturity of up to €30,000 per annum as an incentive to increase pension uptake.

The Professional Insurance Brokers Association (PIBA), the country’s largest representative body for brokers, said the Minister for Finance should use the budget to signal his intention to introduce legislation to make the necessary changes.

At present, only 25% of the lump sum available on maturity of PRSAs is tax-free.

Personal Retirement Savings Accounts were introduced by the Government to help increase the uptake in pensions.

However, the Minister for Social Welfare, Seamus Brennan confirmed that only one quarter of the working population has made adequate provision for pensions.

Despite an intensive promotion campaign, only 37,000 thousand people have taken out PRSAs to date.

The Chairman of PIBA’s Legislation Committee, John Hogan said the low level of interest in PRSAs contrasted starkly to the major success of the SSIAs or Special Savings Investment Accounts, which provide a 100% tax-free lump sum at the end of a five-year period.