The following changes to pensions were announced in the budget:

Employer PRSI on pension contributions:As noted above, the current relief of 50% of employer PRSI for employee contributions tooccupational pension schemes and other pension arrangements is being abolished from 1 January2012.

Approved Retirement Funds (ARF’s):The annual imputed distribution which applies to the value of assets in an Approved Retirement Fund(ARF) at 31 December each year is being increased from 5% to 6% in respect of ARF’s with assetvalues in excess of €2 million (or, where an individual owns more than one ARF, where the aggregatevalue of the assets in those ARF’s exceeds €2 million). The increase will apply in respect of assetvalues in affected ARF’s at 31 December 2012 and future years.The transfer of ARF assets on the death of an ARF owner to a child of the owner aged over 21 issubject to a final liability to tax equal to the standard rate of income tax in force at the time of themaking of such a distribution (currently 20%). It is proposed to apply a higher final liability tax rate of30% to such transfers and the details of this will be published in the Finance Bill.

Vested PRSA’s:The annual imputed distribution provisions which apply to ARF’s will also apply on the same basis to“vested” PRSA’s, where the assets are retained in the PRSA rather than being transferred to an ARF.This will include an increased deemed distribution percentage of 6% for vested PRSA’s with assets inexcess of €2 million. Where an individual holds more than one PRSA the deemed distribution willapply to the aggregate of the assets in all of that individual’s PRSA’s once any one of them is vested.The increase will apply in respect of asset values in affected PRSA’s at 31 December 2012 and futureyears. Further details will be published in the Finance Bill.