Pensions Question

Rebel1977

, is €6.5m the max someone can have in a pension, and what is the max they can take as a tax free lump sum ?

Kennie1

Depends... Up until the budget the max that you could have was 5.4 mil if the fund was over this the person would have to had applied for a "personal fund threshold (PTF)" back when the "standard fund threshold (STF)" was capped to 5.4m a number of years ago. Fingers the banker would have done this on his 28m pension fund. The budget further reduced the STF to 2.3m, however if an existing pension fund is over this they may apply to the revenue within the next 6 months for a PFT.

The Tax free lump sum(tfls) was reduced 200K in the recent budget also. The max that one can take is usually 25% of the fund for personal pensions and 150% of salary for company/occ pensions so if a person had a pension over 2.3m they would be treated as follows. First 200k tax free, next 375K would be taxed at standard rate and balance would be taxed at marginal rate.

Rebel1977

Thanks for that, in middle of studying for QFA exam thought I would get some up to date info as my book is all the 2010 tax rates.

Am I correct in saying that:
PRSA: 25% tax free, balance to annuity/arf and 63,500 into AMRF unless they hav a guarenteed income of €12.900

Same as above for Personal Pension Plan

For company pensions it's 150% final renumeration and balance into annuity.

Kennie1

Rebel1977 wrote: »

Thanks for that, in middle of studying for QFA exam thought I would get some up to date info as my book is all the 2010 tax rates.

Am I correct in saying that:
PRSA: 25% tax free, balance to annuity/arf and 63,500 into AMRF unless they hav a guarenteed income of €12.900

Same as above for Personal Pension Plan

For company pensions it's 150% final renumeration and balance into annuity.

Exam is based on 2010 tax and pension rates. Guarenteed min income has to be 12,700.... All this info is in the book now go and study it as boards.ie cant help in the middle of the exam:p Study all the past papers, they are available on the lia website, as an exam setter said to me once there is only so many questions that we can ask;)

Rebel1977

Thanks for that one. I have all the exam paper of 2010, think there was 5 exams in 2010 so surely there will be al least one repeat, also noticed always a question on cpc/mifid.

ferga_com

Rebel1977 wrote: »

Thanks for that, in middle of studying for QFA exam thought I would get some up to date info as my book is all the 2010 tax rates.

Am I correct in saying that:
PRSA: 25% tax free, balance to annuity/arf and 63,500 into AMRF unless they hav a guarenteed income of €12.900

Same as above for Personal Pension Plan

For company pensions it's 150% final renumeration and balance into annuity.

Yes, pretty much except that it's €12,697 guaranteed income at present.

Also for Occupational Pension Schemes where the member is a 5% director, they can choose either 150% of final salary as tax-free lump sum (assuming they have sufficient service) or 25% of the fund. If they choose the former, they cannot also avail of the ARF options.

Good luck with the exams.

phunkymonk

Hey rebel 1977 could you forward me on the past papers you have for the pensions exams if i PM you my email?

Cant find examples anywhere apart from the end of ch q's lia have on their website...