MGM Capital Insights – March 2013

Finance Bill 2013


Early Access to AVCs

The Finance Bill confirms that people with AVCs and PRSA AVCs can withdraw up to 30% of their accumulated value. Any amounts withdrawn will be subject to tax at the individual’s marginal rate, but not USC or PRSI (subject to a change in the next Social Welfare and Pensions Bill). The option will be available for a three year period from the passing of Finance Act 2013

The Finance Bill 2013 confirms the scope of the Early Access facility as follows:-

Included = Defined Contribution AVCs and PRSA AVCs

Excluded = Retirement Annuity Contracts (RACs) and Personal Retirement Savings Accounts (PRSAs), Defined Benefit AVCs (Added Years), AVC (term life cover) and Executive Pensions.

The option is available to a limited number of people. This is not available to company directors as the pension contributions made are employer/employee. This is not available to Personal Pensions or PRSAs. This option is available to employees of a defined contribution scheme (e.g. company pension, GMS) where AVC contributions were made into the scheme or a PRSA AVC contract.


Pension Levy

As announced in the Budget – the four year pension levy of .1% p/a announced as part of the Jobs Initiative will not be extended beyond the original end date of 2014.


Reduction in AMRF Limit

The AMRF limits (Fund and Guaranteed Lifetime Income) for AMRFs have been reduced. This is a new addition and not previously flagged in the Budget 2013. This will allow more people to access AMRF Funds and Vested-PRSA AMRF funds rather than waiting to age 75 (when AMRFs become ARFs).

The current limits for post Finance Act 2011 AMRFs (i.e. since 6th February 2011)are €119,800 and €18,000 p.a. and these have been reduced down to the previous limits of €63,500 and €12,700 for a limited period – for 3 years from the passing of the Finance Act 2013, which we expect to be early April 2013.


Removal of Eligible Liabilities Guarantee Scheme (ELG)

February 26th the Department of Finance announced that the Eligible Liabilities Guarantee Scheme (ELG) will be removed from all deposits greater than €100,000 from midnight March 28th 2013.

As you know, this temporary scheme was originally introduced in response to the financial crisis, so the announcement is a positive indication that the economy and the Irish banks are returning to a stronger position.

The Deposit Guarantee Scheme which is operated by the Central Bank for deposits of up to €100,000 per depositor, per institution remains in place

For more information on the removal of the ELG please click on the link below-


Finally… on a lighter note, check out Google glass – capturing what you see!


Have a good week