IAPF Pre-Budget Submission 2026: Pension Tax Relief and Retirement Savings Adequacy

The IAPF has published its annual pre-budget submission to the Department of Finance, setting out a package of targeted measures it believes are necessary to strengthen the long-term adequacy of Irish retirement savings and to address a number of anomalies in the current pension tax framework.

The centrepiece of this year's submission is a call for an increase in the standard fund threshold, which currently stands at €2 million. The IAPF argues that the threshold, which has not been meaningfully revised since 2014, has been significantly eroded in real terms by investment growth and inflation over the intervening decade. Without an upward revision, the association warns, an increasing number of diligent long-term savers will face unexpected tax penalties on retirement savings accumulated through entirely normal pension contributions over a working lifetime.

The submission also addresses the structure of pension tax relief, which the IAPF acknowledges is a politically sensitive area. Rather than calling for an increase in the marginal rate relief available to higher earners, the submission focuses on the position of lower and middle-income workers, many of whom receive little effective incentive to save under the current system. The IAPF proposes a matched top-up model for earners below €40,000, designed to complement the auto-enrolment state contribution.

On approved retirement funds, the IAPF calls for a review of the minimum imputed distribution rules, which it argues are increasingly out of step with the longevity profile of current retirees and risk forcing drawdown at rates that will deplete funds before the end of life.