The Minister for Social Protection, Heather Humphreys TD, has announced that the pensions auto-enrolment scheme will begin on 30 September 2025. The Institute supports the introduction of auto-enrolment but remains concerned with its impact on small businesses.
In last week’s Budget, it was announced that Finance Bill 2024 will provide for the taxation of the Automatic Enrolment Retirement Savings Scheme (referred to as AE). According to the Budget publications, the tax treatment “aligns as much as possible with that of Personal Retirement Savings Accounts (PRSAs), other than for employee contributions.”
Employer contributions will be tax relieved, the growth in the AE funds will be exempt from tax and the AE funds will be taxed on draw down, other than the 25 percent tax free lump sum.
The lump sum will be able to be taken tax free up to €200,000, will be taxed at 20 percent between €200,000 and €500,000 and taxed at 40 percent above €500,000.
As the State will be making a direct contribution for employees within the AE scheme, no tax relief will be provided for employee contributions to AE.
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