The Gazette 1967/71

PENSION SICKNESS AND ACCIDENT INSURANCE SCHEME The Society was one of the professional bodies which made representations to the Minister for Finance with the object of improving the terms on which self employed persons could provide for their retirement. As a result the provisions of Part VI of the Finance Act, 1958, were introduced. These provisions secured two concessions. Firstly certain life assurance companies were enabled to accumulate contributions to their annuity fund free of tax and as a result there was a marked improvement in annuity rates. The second conces sion permitted a self employed person to set off within prescribed limits the full annual contribu tion to retirement annuities as a charge against gross income thereby obtaining full relief from both income tax and sur tax. That members who might wish to do so might take advantage of these new concessions on the most favourable terms the Council engaged the services of Irish Pensions Trust Limited to analyse and compare all the contracts available and as a result a scheme was devised which gives preferen tial terms to members of the Society. The scheme also provides for the continued advice of the consultants to all members who participate in it, keeping them in touch with any developments which may occur and which may prove to be to their advantage. It also provides for advice at the retiring age as to the relative value at that time of any options available in the light of the circumstances then prevailing. The scheme is composed of two main sections: Section I: Personal Pension Policies A member of the Society who is under the age of seventy years is eligible to effect pension benefits under this section. The most important feature of the scheme is that a member is not committed to maintaining premium payments each year at a fixed rate determined at the outset. He may com mence by making a single premium payment of as little as £100 and this will secure for him a pension payable each year from the attainment of the normal pension age selected even if he pays no further premiums. He may of course pay further premiums or an intermittent series of further premiums and so secure increases in the pension. The further premiums may be for varied amounts but the minimum amount acceptable is £50. If a member wishes, a particular premium may at any time be applied to secure a pension on terms different to those under the original contract and

accordingly a member may secure for himself retirement benefits on the most favourable terms available at the time of payment; this is important in that different assurance companies may lead with rates and policy conditions at different points of time and a member is not committed for all time to the assurance company which offers the best terms initially. Normally pensions are payable monthly com mencing one month after attainment of the pen sion age selected. The pension is payable for a minimum period of five years and for so long thereafter as the member lives. Alternatively the member may at the outset choose to have his pension payable either for a fixed period of ten years and as long thereafter as he may live, or throughout life without a period certain. At any time before the pension payment starts a member may decide to forego a part of the pension payable on his own life in order to secure a pension payable to his widow or other depen dant should he pre-decease them after he com mences to draw his own pension. The member has a further choice in that the contract may provide that in the event of death before the attainment of pension age the total premiums paid will be returned (a) without inter est or (b) with compound interest at 4 per cent. Naturally the pension in the former case will be higher. Premiums returned on death under the contracts are payable to the estate tax free. Section 2: Sickness and Accident Insurance A permanent non-cancellable sickness and acci dent scheme has also been arranged. However bad a members sickness record may prove to be after he effects a policy the contract cannot be discontinued by the insurance company before the agreed ceasing age (age sixty-five) nor may the premium rate or policy conditions be varied. This cover is intended for long illnesses and cases where there is a permanent or very prolonged break-down in health. Accordingly after the expiry of an agreed period (which may vary from four weeks to twelve months) a member continues to be prevented by sickness or accident from carrying on his normal or any alternative occupation he will qualify for benefit under the scheme. Sickness benefit will continue to be paid throughout the period of total disablement right up to the age of sixty-five years; moreover were the member to ' recover for example after three years benefit would cease, but he would then be entitled to re-com mence contributions at the rate formerly payable. Consequently if a fresh claim were to be admitted 98