New EU rules mean existing arrangements are no longer valid and regualtor is threatening prosecutionsTens of thousands of business owners face the threat of prosecution over their current pensions arrangements. Photograph: iStockTens of thousands of business owners face pensions limbo with the regulator warning they may face prosecution if they continue using their current pension schemes.
The rules apply to anyone who has set up a single member scheme since April of last year. About 1,000 such one member arrangements are established every month. Figures provides by Brokers Ireland show a person in a single member scheme could put €150,000 a year into their pension fund at the age of 40, with a view to retiring at 60. That is over five times the €28,750 a PAYE worker of the same age can put into a pension — because they are limited to 25 per cent of their gross earnings, up to an earnings cap of €115,000.
Under IORPS II governance rules, from July 1st, the old single member schemes are no longer compliant. As a halfway house, insurance companies were offering a trustee service to allow holders of one-member schemes to continue saving. But they have now been warned off by the Pensions Authority, which regulates the sector.
Typo-regulator.
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