Call for earlier access to pension funds

PENSION HOLDERS should be allowed to access some of their fund before they reach retirement age, the Irish Brokers Association has said.

Addressing the Oireachtas Joint Committee on Social Protection yesterday Linda Gallagher, a member of the association’s pensions’ committee, referred to The Irish Times “Squeezed Middle” series, saying there were many thousands of people who were “severely indebted” and had considerable sums in pension funds which they could not access.

“At retirement currently people are allowed to take 25 per cent of their pension fund as a tax-free lump sum up to a maximum of €200,000, but retirement age might be too late. Many people need these funds now to remain solvent. We are proposing that people be allowed to access this tax-free sum during their lifetime rather than restricting it to retirement.”

She said members had clients in their offices in tears, begging them to make representations to the Pensions Board and the Department of Finance, to let them access funds now.

“It’s very frustrating. People don’t understand it actually. They have been saving prudently for 30 years, they have this fund, they need some of it now and they can’t access it. They may have a debts crisis or they may have been made redundant and have wonderful ideas to start a business and even create jobs, but they can’t get the funds.”

Mary Mitchell O’Connor (FG) said she was delighted to hear the presentation. She had approached Minister for Finance Michael Noonan with the same plan a month ago. Other members of the committee also expressed an interest in the proposal, though chairman Aodháin Ó Ríordáin (Lab) said safeguards would be necessary to protect people from accessing amounts that would result in a shortfall in their retirement fund in later years.

The Irish Brokers Association also called for incentives to enable private sector pension funds to invest in infrastructural development. Tom Berrigan, also a member of the pensions’ committee, said 98 per cent of those members asked confirmed their pension fund clients would consider allocating 5 per cent of their pension fund to Irish infrastructural investment.