Imagine having the freedom to fully fund your retirement and pension plans up to the current standard fund threshold of €2m with flexibility. These new rules rewarded business owners, many of whom spent decades building businesses, employing people, supporting communities, rearing families and paying loans often to the detriment of looking after their own retirement plans and funding their pensions. Alas, we were afforded a unique opportunity that allowed business owners, company directors, and high earners in Ireland to contribute up to €2 million to their pensions without constraints on timing or funding limits assuming all the rules were adhered to. But now, unfortunately, this window of opportunity is about to close, with significant restrictions set to take effect on January 1, 2025.

With only six weeks remaining before these new rules come into play, now is the time to take decisive action to secure the benefits of the current system. Below, we outline what these changes mean for you and why it’s essential to act now.

A Brief Window of Flexibility – Don’t Let It Pass You By

The good news introduced at the start of 2023 offered unparalleled pension funding options. This flexibility allowed you to fund your PRSA at levels tailored to your needs and goals, without the constraints of contribution limits. This unique opportunity was designed to empower you to shape your financial future with unprecedented freedom. But now, time is running out, and this flexibility will end soon.

On January 1, 2025, new rules will limit employer contributions to PRSAs to a maximum of 100% of an employee’s annual salary. Any contributions that exceed this cap will be considered a Benefit-in-Kind (BIK) for the employee, resulting in additional tax liabilities. This change closes the door on the unrestricted funding model.

Key Actions to Maximise Contributions Before the Deadline

To make the most of these final weeks, there are a few critical steps to consider:

• Fully Fund Your PRSA Before Year-End: The current unrestricted funding model allows you to maximise contributions, but only until the new cap comes into force. This may be your last chance to fund your PRSA at higher levels without the upcoming restrictions.

• Accelerate Future Contributions: Consider bringing forward planned contributions from upcoming years, using the flexibility that’s still available. This approach can help you secure a more robust retirement foundation under today’s more favourable rules.

• Seek Tailored Advice from a Tax Professional: Determining the right level of contribution based on your role, financial situation, and goals is essential. Consulting a tax adviser in conjunction with your financial planner and or Atlantic Wealth Management can ensure you make the most of this brief remaining period.

New Standard Fund Threshold (SFT) Increases – Plan for the Future

While the restrictive PRSA funding cap marks the end of a unique opportunity, there is still a chance to benefit from the incremental increases in the Standard Fund Threshold (SFT). From 2026 through 2029, the SFT will rise by €200,000 each year, reaching €2.8 million by 2029. This gradual increase allows for higher tax-efficient retirement savings, even as the PRSA funding cap takes effect.

Consider how these changes could impact your long-term retirement strategy:

• Plan with the New Thresholds in Mind: With each year’s increase, the potential for tax-efficient savings grows. Planning now will allow you to optimise your retirement fund over time.

• Delay Pension Access if Possible: For those who can wait, postponing pension crystallisation may provide access to the higher SFT thresholds, maximising the potential for tax efficiency.

Why Acting Now Matters

The pension funding freedom introduced in 2023 provided a once-in-a-generation opportunity to invest in your future with flexibility and control. But as January 2025 approaches, the door on this opportunity is closing. This is the moment to ask yourself: have I done everything I can to maximise the value of my retirement fund? With these new restrictions, it’s vital to make the most of the remaining time.

Atlantic Wealth Management: Your Partner in Purpose-Driven Financial Planning

At Atlantic Wealth Management, we understand that real financial planning is about more than just following rules; it’s about helping you achieve the vision you have for your retirement. As you prepare for these regulatory changes, we’re here to support you with a personalised, holistic approach that considers your financial and personal goals. In collaboration with your tax adviser, we’ll ensure that every decision aligns with both your immediate needs and long-term aspirations.

Take Action Before the Opportunity Closes

As the Finance Bill 2024 brings new restrictions, now is the time to secure the benefits still available. Don’t let this unique opportunity pass you by. Contact Atlantic Wealth Management today for a discreet, confidential consultation. Let’s work together to shape a retirement strategy that leverages these final weeks of flexibility and prepares you for a secure, fulfilling future.

Visit www.atlanticwm.ie to schedule your consultation and take control of your financial future.