Newsletter November 2019

Welcome to our World

Firstly, we’re delighted to announce that PAX has been recognized as the BEST FINANCIAL PLANNING FIRM 2019 at this year’s AI International Finance Awards. This award shows that our ethos of focusing on our customers and their goals, as opposed to focusing on a product or service, has brought us to the forefront of our field.

This award wouldn’t have been possible without the work of our team. Our highly motivated, experienced and dynamic team are working constantly to provide you with the best service possible.

Our team has grown a lot over the past year as we have welcomed many fresh faces to the PAX family, and we hope to continue to add many more as our business grows and flourishes.

Finally, we have introduced a new review process called We Care. The We Care team has been created to provide an additional layer of support to you, and will work alongside your Financial Advisors to ensure consistent management of our “Three Worlds” ethos;

Clearchoice summit 2019

ClearChoice held their second annual ClearChoice Summit opened by the Minister for Health Simon Harris at CityWest Hotel Dublin on August 29th. ClearChoice is a sister company of PAX that aims to train and educate other brokers by placing a spotlight on under-discussed issues that have a wider effect on the financial advice industry. It was an incredible day filled with expert speakers from across the globe and helped to place a focus on the ties between finance and mental health and highlight the important role that brokers play in protecting their client’s mental health and wellbeing in their work.

With the success of a second summit, ClearChoice has further cemented itself as a thought leader within the financial advice industry and will continue to place focus and attention on their efforts to spread impartial and expert advice across the financial advice sector.

Paul Appointed to Greenman

We are delighted to announce that our CEO Paul Merriman has been appointed to the Investment Advisory Committee of Greenman OPEN. This appointment will continue to ensure that clients of PAX Asset Management who are invested in Greenman OPEN, will have a strong continued voice in the ongoing success of the fund, and have advance knowledge of developments and transitions, as the fund continues to grow. It also allows us to ensure that Greenman OPEN continues to provide the returns that our existing investors have become accustomed to and that we have committed to obtaining for our newest entrants.

The World

Aviva & Friends First Merge

Last July Aviva completed the transaction to acquire Friends First and they have been operating under Aviva since January of this year.

This takeover marks Aviva as one of the largest composite insurers in Ireland.

Royal London Possibly Enter Pensions

Royal London is entering the Irish Pensions market. We believe that this will have a significantly positive impact on the pension market.

When Royal London entered the protection market in 2014, taking over the former Caledonian Life, their innovative product solutions and forward-thinking predicated excellent protection enhancements across all providers.

Granted, the Pension market is a far less fluid place for dramatic changes to pension products considering how restricted pensions are from a revenue and pensions authority perspective, but we still expect some dynamic shifts in the way pensions are marketed or priced.

Pension Season

Pension season is in full swing and that means that it’s your last chance to claim tax relief on backdated pension contributions and get some money back for the year. A pension is a great way to reduce your tax bill as when you pay a pension contribution you can reduce your tax bill by the tax relief you get on your pension contribution.

People who are self-employed or are in non-pensionable employment (if you are working for a company without a pension scheme) stand to benefit the most from these tax reliefs. The government has also incentivised private pensions to get people saving. For example, if you are a 40% taxpayer and you pay €100 into your pension, you get a tax relief of €40, so in reality, you are only paying €60 a month into your pension but getting the benefit of adding €100 in each month.

The key date in play for tax season is October 31st, which is the deadline for filing your claims, or November 12th if you use the Revenue Online Services (ROS) to pay your tax bill. If reducing your tax bill is of interest to you talk to your accountant or call any of our advisors today and we would be happy to guide you through the process and help you make the most out of pensions season.

Budget 2020

There were very few changes from 2019’s budget in budget 2020 as the major focus of the budget was preparing the country in case of a no-deal Brexit outcome. However, there were still notable differences that will affect the average person.

The state pension (contributory) remained at €12,911 and there was no change in pension tax relief contributions or tax exemptions on pension investment income. There were also no changes to the standard or higher rate of income tax brands as well as no changes to the rate of USC (Universal Social Charge) and medical cardholders will continue to pay a reduced rate of USC until December 2020.

There was a rise in the price of cigarettes and tobacco, an increase to the qualified child payment, a change to the earned income credit and the Help-To-Buy incentive, a scheme designed to aid first time buyers or people building their first homes, has been extended until 2021.

Auto Enrolment

Ireland is introducing a pension auto-enrolment scheme under the government’s plans for pension reform. These auto-enrolment plans are being introduced to address the lack of private pension cover for 65% of workers, aiming to substantially improve retirement savings coverage within Ireland.

These auto-enrolment plans were published as Strawman Proposals, meaning they aren’t firm government policy, but they are designed to generate discussion & improve ideas. Under this scheme workers between the ages of 23 and 60 who earn over €20,000 a year will be automatically entered into a defined contribution (DC) pension scheme where they will contribute 1% of their salary a year to their pension, which is matched by employers.

This will go up by 1% each year, aiming to have employees save 12% of their salary into a pension by 2028. The state will add an extra 2% to this making the total projected savings under the scheme 14% by 2028. Those outside of the age range or earning less than €20,000 per annum also have the option to opt into the scheme.

Auto-enrolment is nothing but positive news all-round. It’s putting pensions front and centre as a financial provision that all Irish workers need to be thinking about.

How Pax can help

At PAX, we’re passionate about getting our clients to focus on retirement planning. It’s great to see incentives for all employers in Ireland to introduce retirement planning as a packaged benefit for their staff.

The proposed implementation date for this scheme is scheduled for 2022. We’re looking forward to seeing some more concrete legislation from the government to understand the actual rollout of the scheme.


Ireland is a little late to the party with implementing the IORP II directive, but the new pension directive is on the way and currently being implemented by the government.

You may be wondering what exactly IORP II is, essentially it is a pension simplification process that is designed to improve the management of pension schemes by implementing stricter rules around governance and communication and setting common standards all pension plans across Europe have to meet.

Your World

What exactly does that mean for you & your pension?

It means that your pension will be better protected due to the enhanced governing and risk management. It will also provide you with clearer, more relevant and more consistent communications about your pension scheme.

On top of all that it will ensure that trustees have the necessary powers and credentials to supervise pension schemes, therefore ensuring you are getting the most out of your pension from people who are closely monitored, governed and fit tighter qualification standards and tests.

These new standards are set to be implemented into the Irish market by the end of the year. The intentions of IORP II are generally positive. However, some trustee firms and providers of self-administered pension accounts have challenged its introduction. Their feelings are that the directive is limiting options for those interested in adopting a more bespoke approach to pension investment. The directive won’t be retrospective though and those involved in self-administered pensions up until it’s implementation won’t be affected.

In PAX, we welcome enhancements to legislation and are always ready to adapt. Whatever comes out of the high court challenge, we’re confident that we will still be able to provide a best in class service to pension clients based on their own needs and objectives.

We offer a financial planning service that is built around you.