As part of our regular product review process, the Investment Protection Annuity (IPA) has been temporarily withdrawn from our post retirement product range. This decision has been taken in view of the current very low interest rate environment which has significantly increased the cost of providing the capital protection benefit under this product.

This change will come into effect immediately. The IPA option has been removed from online quotation system www.pensionchoice.ie and users will no longer be able to add this feature to new annuity quotations. The option has also been removed from our Annuity Application Form.

The chart to the side (source: Irish Life Investment Managers) illustrates the progression of Eurozone yields over the last five years. There has been a very dramatic fall in yields over this period, in particular since the start of 2014. This fall in Eurozone yields has resulted in generally lower annuity rates and therefore, increased the level of the death benefit under the IPA product. The lower interest rate environment also means that a higher value must be attributed to benefits that are payable in the future.

The combination of these factors means the IPA structure is no longer viable in the current economic environment.

We will honour all Investment Protection Annuity quotations that have been obtained up to and including 3 June 2015, provided they are submitted to us inside the normal 14 day quotation guarantee period. Thereafter, we will not provide new quotations with this option or transact any new business on this basis.

There have been some recent changes regarding UK pension regulations. One impact of this is that UK Revenue (HMRC) has introduced a new QROPS requirement that a scheme/product cannot accept a transfer unless retirement before age 55 is prohibited. This is known as the ‘pension age test’.

Some of you may be in receipt of recent correspondence in relation to this from HMRC which refers to this ‘pension age test’ and its introduction from 6 April 2015. Scheme Managers are required to respond to HMRC by 17 June 2015 to confirm whether their scheme continues to meet the QROPS requirements. If a response is not received HMRC will exclude the scheme from being a QROPS and it will be removed from the published list.

Importantly HMRC confirm that whether a scheme is a QROPS will not affect the members who have already transferred to your scheme but if your scheme is no longer a QROPS you cannot accept new transfers without a 55% UK tax charge applying to the transfer. Therefore this change should not materially impact existing cases that have already received a transfer from a UK pension scheme.

Irish Life’s pension products do not meet this requirement. Consequently Irish Life (both Corporate Business and Retail) is now closed for any UK pension transfers into our QROPS approved products.

For Corporate Business this means that transfers will no longer be accepted into our QROPS Personal Retirement Bonds (PRBs).

Separately, we are aware that a number of Corporate Business group pension schemes were also registered as QROPS. Should we receive requests for UK transfers into Corporate Business group schemes in future, we will be informing the scheme contact that the scheme does not meet current QROPS approval requirements and that the transfer should not therefore be accepted.

Any questions or queries in relation to this can be passed to your usual Irish Life contact.

Bill Kyle wrote the article below for the Sunday Independent giving his view on Ireland and our potential pensions time bomb.

I’ve had the opportunity to live in Ireland for two years now. It has been a real privilege to experience Irish life and I am truly enjoying living in Ireland. It is a beautiful country and within two to four hours of driving you can see diverse and outstanding natural beauty. The people are warm and welcoming and genuinely want visitors to have a great time. I have been to 31 of the 32 counties at this point and enjoyed many hurling, football and rugby matches along with the unique character of links golf. My wife and I are very proud to show Ireland to our many visitors from Canada.


The Irish people deserve the respect they have earned for the way they have dealt with the financial crisis and the hard-fought start to economic recovery. Ireland is well positioned to continue this positive momentum as the English speaking gateway for doing business in the European Union and having a talented and educated workforce available to companies that want to invest here.

I am often asked what it’s like to live in Ireland. It’s easy to come up with a long list of positives as it is truly a remarkable place. People also ask what has been the biggest surprise. While there are more similarities than differences between living here and in Canada, I have been disappointed to find many examples of government policy that penalise people who behave responsibly by sacrificing short term gratification to plan for their future. I have always worked in an environment of stable public policy where people are encouraged to save for retirement and provide for themselves and their families in the event of illness or untimely death. And when changes to that system are contemplated, careful consideration is given to make sure that all potential consequences are well understood. In contrast, here I discovered that there is a tax on buying life insurance and a pension levy on retirement money already saved. Within a few months of arriving I witnessed the pension levy amount increase and the tax deductibility of health insurance significantly reduced. Changes of this nature, particularly when made in a short time frame, undermine people’s confidence and desire to plan for their futures.


While Ireland has the benefit of a younger average age than most developed countries, it still faces the demographic changes that will see 30% of people born today living to see 100. Recent retirees will average over 20 years in retirement. In the future, Government benefits such as health care and pensions will be supported by just over two workers for every retiree, compared to a 5-1 ratio a few years ago. Given this reality, it is critical that public policy be put in place now to lessen the demand on government resources in the future and to reduce the transfer of this burden to future generations. With the economy recovering, now is the right time to start implementing policies that make existing social programmes sustainable and encourage people to become more self-reliant.


There are many policy alternatives that could be considered and it is important that any course of action addresses the unique needs of Ireland and not blindly adopt ideas from other countries. An example of a unique Irish challenge is a lack of experience with investing compared to other countries. For example, 25% of Irish wealth is held in cash deposits vs only 8% in Canada and 12% in the UK. Recent research suggests that very few Irish investors are aware that their cash is earning almost no return. It is important that the unique needs are understood by establishing a fact base and not accepting opinion. In Canada, during retirement reform discussions, a number of inaccurate assumptions drove much of the original debate and proposed solutions. These assumptions were based on opinion and in cases where data was used, no analysis beyond averages was done. Once specific research was undertaken, it was found that the problem areas were completely different from what had been assumed. The original broad-based proposals were found to be addressing the wrong segments of the population and presented significant unintended consequences. Instead, implementing a combination of smaller, targeted reforms would be much more effective and present less risk.


It is critical for Ireland’s future to bring sustainability to its social programmes. That means people have to have the confidence to invest in their futures. That requires stable policies that encourage desired outcomes. If individuals are to be asked to commit their hard-earned money to meet their future needs, they need to have confidence that the pitch will not be dramatically tilted against them at some point in the future. I believe it is important to develop solid fact bases and give careful consideration to establishing well thought out policies and then avoid constant tinkering so people can put good plans in place. The events of the recent past may make this difficult but that should not stop public policy from strategically looking to the long term and taking encouraging steps now.

Mention retirement planning and more often than not, people’s thoughts turn straight to financial planning and pension provision. Scratch the surface, however, and people’s concerns can run a little deeper than financial fears. There is more to consider as we embark on this transitional life stage than counting one’s pennies. Yet, this is generally the area where employers feel most obliged to support their staff.

The reality is that retirement – as with all transitions in life - can be a time of great upheaval emotionally, psychologically and physically. For that reason, it is equally as important for people to consider the non-financial implications of their move from the workplace into the new life stage of retirement.

A survey published by the Retirement Planning Council of Ireland in November 2014 indicated that half of people approaching retirement did not feel ready to retire. Feelings of apprehension, worry and concern were dominant despite the fact that more than two-thirds of the same group have some kind of financial provision in place and believe they will be financially secure when they retire. This implies that something else beyond financial planning is at play, causing feelings of uneasiness.

Our wellbeing at any stage in life is dependent on balancing three elements – prosperity or finance, health and happiness. When we retire we undergo a transition process through which almost every aspect of our life will change, regardless of career history or professional background. This can have a major impact on our happiness levels. Our daily routine, the amount of spare time we have, our social networks and personal relationships will all shift dramatically. Our role in society, the status that often goes along with that role and the way that might have shaped our personal identity can also be affected. As we grow older we also need to focus more upon our health and how we manage it. Failure to recognise these lifestyle changes - let alone plan for them - can lead to a very difficult existence.

Encouragingly, the same Retirement Planning Council research has also highlighted that once people had taken the time to consider the lifestyle changes ahead and understand how they might deal with them, they felt significantly more upbeat about their retirement. A remarkable 95% of people felt excited, positive and optimistic about their retirement upon completion of a retirement planning course focusing on the psychological, physical and financial elements of retirement.

Undeniably, financial preparation for retirement is vital but without consideration for the lifestyle shift, many people will struggle to adapt to their new way of life. Tending to the psychological portfolio is equally as important as building the financial one and giving some serious time and thought to preparing oneself will go a long way to smoothing the transition into this new life stage.

Elizabeth Carvill is Head of Development at the Retirement Planning Council of Ireland, an independent not-for-profit organisation working with more than 400 organisations to support their staff as they approach retirement by delivering a range of practical pre-retirement courses. See www.rpc.ie for more information.