Pension fund levy

The 0.6% stamp duty levy on pension fund assets is to increase to 0.75% for 2014.  The levy will then be reduced to 0.15% for 2015.

Changes to the standard fund threshold (SFT) regime

With effect from January 2014, tax relief will only be available on pension contributions up to the level that provides an annual income of up to €60,000. As such with effect from 1 January 2014 there will be a further reduction in the Standard Fund Threshold from €2.3 million to €2 million. 

The current single valuation factor of 20 used to value Defined Benefit pension entitlements will be replaced by a range of higher factors which will vary with the age at which the pension is drawn down.  The aim of this measure is to improve the equity of the Standard Fund Threshold regime as between the Defined Benefit and the Defined Contributions pension arrangements and between those who retire at an early age and those who retire at a later age.

Where an individual's pension rights exceed the new lower SFT on 1 January 2014, they can protect those rights by formally applying for a Personal Fund Threshold (PFT) of up to €2.3m (unless the individual already has an existing PFT).