What Is a Personal Pension Plan?

download (2)Regardless of an individual’s age, appropriate retirement planning or contributions to pension plan is quintessential to ensure a secure living after retirement. As a nation, Ireland people live for a longer period and hence the need for a realistic retirement plan cannot be understated. Apart from this, in 2014, the State Transition Pension was abolished and thereby increased the age for pension to 66. Also, the age for state pension is likely increase to 67 in the year 2021 and by 2028 it would be 68 years. Now, with all these facts in place, there isn’t a better time to begin or review one’s pension.

Personal Pension Plan – Defined

Personal pension plan refers to the individually organised pensions by the employed or self – employed people of Ireland that do not have any pension scheme. In the recent years, the rules governing personal pension plans have changed significantly. Personal pension schemes are not under the purview of the Pensions Authority anymore instead they are subject to tax law and financial services legislation (even for general law on insurance). Tax exemption can be availed for personal pension contributions while the amount of relief availed are based on the age of beneficiary. From 27th March, 2013 the beneficiaries can withdraw a maximum of 30% of the value of Additional Voluntary Contribution (AVC) done to the occupational pension schemes. This is applicable for 3 years only (till 27th March, 2016). Here are some of the rules pertaining to a Personal Pension Plan in Ireland.


Personal pension policies and insurance policies are similar in most of the cases in Ireland, with the main difference being the tax relief component. Contributions to pension schemes attract tax relief unlike insurance policies provided the required conditions are met.

Insurance companies invest the premiums paid by its customers in an investment fund. The customer cannot mobilise the funds and invest in other sources until the time of maturity. Even upon reaching the specified age, the policy holder is obliged to utilise the accumulated funds to buy an annuity. But after 1999, the policy holder is no longer obliged to buy an annuity and can mobilise between various funds with a considerable amount of flexibility.

Tax relief for Pension Contribution

For authorised personal pension agreements, an individual is eligible to avail tax relief for pension contributions. The older an individual is, more generous is the tax relief. Below is the amount qualified for tax relief based on the contributor’s age applicable since January 2011.

Age of the beneficiary

% of Amount eligible for availing tax relief

Less than 30 Years

15% of net appropriate earnings

30 – 39 Years


40 – 49 Years


50 – 54 Years


60 and above


For certain professions and occupations that include professional athletes also, the maximum amount is applicable to them as well. A limit of €115,000 on the earnings is taken into consideration. This eliminates the option of buying annuity from the proceeds of the individual’s pension policy, but not compulsory. This is not applicable generally for occupational pensions but for Additional Voluntary Contributions (AVCs) contributed by people in occupational pension schemes.


FASB Updates Recognition of Breakage for Prepaid Stored-Value Cards

imagesOne of the five issues considered at the March 19, 2015 meeting of the Emerging Issues Task Force, (“The Task Force”) was the issue of whether liabilities arising from the sale of prepaid stored value cards under three party arrangements should be categorized as financial or non-financial liabilities.

Consumers may purchase prepaid stored value cards (gift cards) under a two party arrangement, directly from vendors who stand ready to provide goods and services to the consumer upon redemption of the card. Alternatively, consumers may purchase gift cards under a three party arrangement from an intermediary such as a financial institution or a prepaid network provider.

Generally, gift cards do not expire, are not and redeemable for cash and may or may not be subject escheatment laws. Often times, gift cards go unredeemed in entirety or in part. These unredeemed balances are commonly referred to as “breakage.”

When gift cards as sold under a two party arrangement, the vendor recognizes deferred revenue (a non-financial liability) at that time of sale, with revenue being recognized when gift cards are redeemed. In addition, the vendor may also recognize revenue for the breakage it expects to be entitled to keep. The recognition of breakage, as currently practiced is consistent with the new revenue recognition standard, ASC606 – Revenue from Contracts with Customers, which becomes effective from calendar year 2017.

When gift cards are sold by an intermediary, the intermediary recognizes a liability for the obligation to provide the consumer with the ability to redeem the gift card in exchange for goods and services to be provided by third party vendors. Upon redemption of the cards the intermediary relives the liability and remits the funds to the vendor and recognizes revenue for any transaction fees and commissions earned.

Whether the intermediary is entitled to breakage revenue or not depends on whether or not the obligation to stand ready to provide payment to third party vendors is a financial or non-financial liability. If the obligation is a non-financial obligation, the intermediary may recognize revenue for the breakage it expects to be entitled to keep.

To the contrary, if the obligation is considered a financial liability should be derecognized upon redemption pursuant to ASC 405-20- Extinguishments of Liabilities. However, if consumers never redeem gift cards that have no expiration dates and are not subject to escheatment laws, the liability remains in perpetuity unless the card is destroyed or there is no longer an obligation to the consumer.

The Task Force reached a consensus for exposure that when an entity issues a gift card that is redeemable for goods and services to be provided by third party vendors, the liability meets the definition of a financial liability. In reaching this consensus the Task Force noted that the intermediary’s obligation is ultimately settled in cash or not at all, if there is breakage.

Additionally, the Task Force expanded the scope of the issue to include prepaid cards that can also be redeemed for cash. In order to permit de-recognition of unredeemed balances. A scope exception was provided under ASC 405-20 to de-recognition the financial liability using a breakage model similar to the model prescribed under the new revenue recognition standard, ASC606 – Revenue from Contracts with Customers.

The proposed guidance will be applied on a modified retrospective basis. Entities adopting the proposed entities would be required to provide disclosures related to recognition of breakage similar to those required under the new revenue recognition standard, in addition to the disclosures required for financial liabilities.

Debra ‘CAS’ Findlay FCCA, CPA is a senior audit manager with Krost Baumgarten Kniss & Guerrero. Ms. Findlay has been in the audit/accounting profession for more than 25 years and provides services to small to medium size closely held corporations across a range of industries, not for profit organizations and employee benefit plans.


Send Money Online

download (1)In the past, sending money online involved a lot of paper work and a lot of time. Often, when we are caught between businesses and there is an emergency case where we need to send money to other people, it would prove to be a painstaking task.

With the recent improvements that financial institutions are initiating to be able to make their services better and provide customers with a variety of options, an online wallet solves this problem. Having your own capacity to send money whenever and however as long as you are able to connect to the internet and the servers of your chosen financial institution gives you the power to transact in your own terms. Additionally, this will give you more freedom and time to make transactions especially when an immediacy in the need arises.

Different financial institutes – like banks and other cryptocurrency applications – provide their members with the capacity to make verified transactions as long as there accounts hold the necessary balances to complete it. The said applications differ from each other depending on the services provided by a user’s provider and additional features like currency exchanges. As long as the recipient has means of verification and acceptance of the money sent, transactions will not be impended and are received in several seconds.

If we look at these scenarios closely, we would be able to say that our financial system has totally changed its course. What’s more is that the charges implicated are not as high as each financial institute vies for more quantitative consumers partnered with the quality of service they provide. They make sure that a user’s online wallet is always protected and that transactions which require sending money online pass through a strict verification system.

This is a joined commitment with other business facilities and is not just made possible by a single entity thus creating a wide array of companies to do business with.

Remember that when you send money online, you are sending off assets which you have worked hard to gain that is why even if the application will do its best to protect your profile and funds, you yourselves should keep your online wallet safe and away from prying eyes. Becoming a victim of online scams and fraud is no longer a new thing and many organizations, laws and regulations continuously make an effort to remind its users to use the applications they provide with proper diligence. It would help a lot if you do check the applications news and updates from time to time so that you will not be shocked if there are recent changes to the online wallet you are using.

Updates are made regularly not just to make the pages better but also to upgrade the security features of an application. As it goes through the daily battle of protecting the accounts, a lot of people would also do their best to hack into the system. Many applications have been compromised in the past and while the convenience of sending money online is profitable to a lot of parties, it is still of high risk and needs to be checked on and monitored regularly.


Digital Currency What It Is, and What It Is Not

downloadThis generation can be considered to be part of the digital age. Sooner or later, everything will be easier through the help of technology. Digital processes will soon replace traditional ways, including money making.

Another booming trend in the industry is digital currency. It is oftentimes associated with information which it is not really related with. Now, what really is digital currency? What are the advantages and disadvantages of this new trend?

Digital currency also known as digital money is an internet based medium of exchange that can be used to purchase goods, pay bills and services, and other monetary transactions. It allows the instantaneous transaction and borderless transfer-of-ownership with no fees to fewer fees. Like traditional or fiat currencies, it can also be used to facilitate payment for physical goods and in-person services.

This trend is also often mistaken as virtual currency. Both can be used for purchases and for paying bills and services, the only difference is that virtual currency can only be used with a specific environment. Digital currency has no boundaries as the user can transfer funds without location limits, but with zero to fewer transaction fees. Also, dealers cannot charge extra fees on the consumer without their knowledge.

As new as it may seem, this trend offers a lot of advantages to its users. Digital currencies are not controlled by a central bank and are better in terms of stability. It does not depend its value on supply and demand status of a certain place. Also, there is a limited supply of money to keep the original value of the currency.

It may also attract those who prefer private monetary transactions. Users have a hold on their personal account information and those who will receive the transaction do not have an access on the sender’s details. One type of this is cryptographic digital currency. It is a medium of exchange using encryption to secure the transactions as well as to monitor the creation of the new accounts. Through this process, the problems on identity theft during transactions are solved.

Another problem that it resolves is money counterfeiting. Online transactions do not require physical cash unlike traditional or over-the-counter bank transactions. It uses some special math applications and cryptography to make counterfeiting almost impossible.

There may be some disadvantages that this new trend might bring to the users because it is still developing, but if you prefer fast, convenient, and secure transactions online, digital currency might be the best for you.