601. Deputy James O'Connor asked the Tánaiste and Minister for Finance if he will consider introducing legislative amendments to the Taxes Consolidation Act 1997 to permit members with dual defined benefit and defined contribution benefits under the same employment to crystallise those benefits independently, at different times, where the dual defined benefit is frozen and no longer accruing; if he will address how the current requirement for concurrent crystallization of dual pension benefits unfairly impacts members in relation to the standard fund threshold limits by forcing a simultaneous valuation that can trigger immediate chargeable excess tax penalties (details supplied); and if he will make a statement on the matter. [43532/26]

I have been informed by Revenue that Chapter 6 of the Revenue Pensions Manual states that all benefits from an occupational pension scheme in respect of the same employment should be taken at the same “Normal Retirement Age”. Chapter 6 also requires that, when determining whether the benefits to be provided under a scheme are within approvable limits, all benefits relating to schemes from the same employment should be aggregated. In addition, Chapter 23.2 of Revenue’s Pensions Manual provides that where an individual has multiple occupational pension schemes relating to the same employment, the same option must be exercised in respect of each scheme, with the exception of benefits taken from an additional voluntary contribution (AVC) scheme.

An exception to these rules applies where a Defined Contribution (DC) scheme is established by an employer to replace a wound-up Defined Benefit (DB) Scheme. The scheme member may choose to exercise different options with regard to the two schemes; that is, an individual who retires could take the Approved Retirement Fund (ARF) option in respect of their DC Scheme while purchasing an annuity in respect of their DB Scheme, and Revenue may permit the member to crystallise the DC element of their benefits before reaching Normal Retirement Age. The aggregated total benefits payable under all schemes related to the same employment cannot exceed the permitted maximum benefits under section 772 Taxes Consolidation Act 1997. Administrators must ensure that the combined value of the benefits taken from both schemes is within statutory limits. This includes the aggregate of any tax-free lump sums payable from both schemes, any pension payable under the DB Scheme and any amount of the DC Scheme that may be invested in an ARF, used to purchase an annuity, or taken as a taxable lump sum. A scheme member’s entitlement to a tax-free lump sum from either scheme may be impacted by the provision of a lump sum from the other, as outlined in Pensions Manual Chapter 23.3.

I am further advised by Revenue that it has reviewed the suggestion by the Deputy’s constituent that concurrent crystallization of dual DB and DC pension benefits unfairly impacts members in relation to the standard fund threshold (SFT) by forcing a simultaneous valuation. It is not clear to Revenue that any inequitable treatment for dual DB/DC pension holders arises. If the Deputy or his constituent can provide further details, I am informed by Revenue that it will engage directly on the matter.