Global News Brief

Ireland’s Budget 2009, brought back two months to October 14, 2008, focuses on restoring public finances in a time of unprecedented global financial strife. Among key measures implemented is a reduction in the limit on personal contributions to pension products and employer-sponsored pension plans, placing an effective cap on maximum contributions to pension plans. The reductions apply to maximum employee contributions; maximum overall (i.e. combined employer and employee) contributions under occupational pension plans are not affected.

Key Details

Measures implemented in this year’s Budget include:

• A reduction in the annual earnings limit to which the maximum member contribution rates can apply. Starting January 1, 2009, this limit will go from EUR 275,239 (USD 343,793) to EUR 150,000 (USD 187,360).
• An increase in the state pension by EUR 7 (USD 8.74) per week – an increase lower than the rate of inflation.
• Freezing maximum thresholds for pension funds on retirement at 2008 levels for 2009. These thresholds will not be indexed to earnings.

Background

The current economic crisis is taking its toll on the Irish government’s finances, and much of the 2009 Budget was aimed at decreasing its growing deficit. Many of these measures included spending cuts and increases in a wide range of taxes.

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