Pension rules to be reviewed as gardaí say fund threshold regime is forcing early retirements

Tax implications of continuing to work meant no senior garda applied for deputy commissioner post, and Government is under pressure to address issue

The Government has decided to review the rules governing senior public servants and others with large pension pots – which senior gardaí have suggested are forcing retirements and preventing them from applying for senior posts.

No senior garda applied for the post of deputy commissioner recently, a fact gardaí attributed to the tax implications of continuing to work and accrue pension rights.

According to the Department of Finance, “There are limits on the size of a pension pot that can get tax relief. The standard fund threshold regime, introduced in 2005, was designed to restrict pension funding over a certain amount, when a 40 per cent income tax charge would come in. The threshold was initially set at €5 million in 2005. The threshold was reduced to €2.3 million on December 7th, 2010. It was further reduced to €2 million in 2014, where it has remained since.”

Because gardaí are entitled to a full public service pension after 30 years’ service (the norm for other public servants is 40 years), their pension pots grow more quickly and tax implications of the present rules are particularly acute for them.


A full public service pension entitles the holder to a monthly pension of half of their final salary plus a lump sum of 150 per cent of their final salary on retirement. Gardaí say that continuing to work at a senior level will lead them to exceed the €2 million value of their notional pension pot and so attract a large tax liability, and warn that the rule could lead to an exodus of senior officers.

The Government has been under pressure on the issue and on Tuesday decided to review the standard fund threshold (SFT) regime, though the review is not specifically aimed at gardaí. It will be carried out by Dr Donal de Buitléar, and completed by next summer, with any changes likely to be part of next year’s budget.

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Pat Leahy

Pat Leahy

Pat Leahy is Political Editor of The Irish Times