22 May 2022

People must get access to their pension funds to cope with Covid crisis says Laois Offaly TD

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Pension fund appeal

People should get early access to their pension AVCs (additional voluntary contributions) in light of the looming economic crisis, according to Fianna Fáil TD for Laois-Offaly, Seán Fleming who has called on the Minister for Finance to act.

Dep Fleming said individuals can make AVCs to their pension to boost their retirement benefits. At present, the funds can only be accessed when a person reaches retirement.

Dep Fleming highlighted that in response to the last global recession, in 2013 the Government introduced a provision in the Finance Act to allow people to access up to 30pc of their AVC funds prior to their retirement. This provision was limited to three years and ended in March 2016.

“I think it is time for the Government to consider bringing this provision back. First and foremost, it would get much-needed liquidity to people to see them through the coming years of financial uncertainty.

“If done correctly and with restrictions in place and for a limited time, it would ensure that people can access their funds now to help them through their impending financial difficulties, but still have a proper well-funded pension in place when retirement comes.

“Ultimately these funds would find their way back into the economy and it would be a good way to get the ball rolling again.

“In 2013 the argument was made that people who all of a sudden found themselves without a job or self-employed people who couldn't run their businesses, would be better able to get through the downturn if they could access the funds they had built up through substantial pension savings.  

“There were strict criteria put in place at the time including a limit on the amount people could withdraw, and a tax on the withdrawal. This was to ensure the integrity of the pension was not compromised and that the person would still have enough to live of at the time of retirement.

“We need to get our economy moving again. People need to be able to access their own money.

“I believe this could be easily implemented again and the Minister should give it his consideration,” he concluded.

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