Growing numbers of Irish expatriates are quietly reshaping their retirement plans by shifting pensions out of Ireland into pan-European structures known as IORPs.

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The pace has accelerated in recent years as more Irish citizens settle abroad, particularly in Portugal, and discover that leaving their pension at home could mean leaving money on the table.

The shift is not marginal. It reflects frustration with rigid Irish rules, capped benefits, and rising levies — and the appeal of EU-level pension regimes that offer flexibility, efficiency, and control.

Malta has become the favoured hub for these transfers, with its robust IORP II framework and strong regulatory oversight.

For Irish expats in Portugal, this option is increasingly seen not as an ‘exotic’ idea, but as mainstream financial planning.

Drivers behind the exodus

Irish pensions are tightly bound by domestic restrictions. The Standard Fund Threshold caps tax-efficient pension savings at €2 million, with anything above punished at a 40% levy.

Lump sum withdrawals are limited, with just 25% tax-free up to €200,000, while the balance attracts 20% up to €500,000, and 40% thereafter plus the Universal Social Charge. Drawdowns are forced annually from the age of 61, and once in an ARF (Approved Retirement Fund), funds cannot be moved again.

By contrast, an IORP in Malta allows up to 30% of the pension pot to be taken tax-free in Malta with no upper limit, access from age 50, optional drawdowns without forced annual withdrawals, and no lifetime cap. However, pension lump sum payments in Portugal are typically taxed as Category E investment income or in some cases as capital gains, depending on individual circumstances.

The jurisdiction also has one of the most extensive double-tax treaty networks in the world, allowing pensioners to mitigate tax exposure in their country of residence.

“More and more Irish expatriates are recognising the structural disadvantages of keeping pensions at home,” says James Green, Director of deVere Europe, which is part of one of the world’s largest independent financial advisory and asset management organizations.

“IORPs in Malta are delivering solutions that better reflect modern lives — international, mobile, and long-term focused.

“In the last two years alone, we’ve seen double-digit growth in the number of Irish pensions being transferred to IORPs across Europe.”

Portugal’s pull

Portugal has become a top destination for Irish retirees. Its climate, lifestyle, and favourable residency schemes make it a magnet for expats, but it is the financial framework that seals the deal.

The country’s Non-Habitual Resident regime has now been replaced with a more restricted “NHR 2.0.” While less generous than the original programme, it still provides tax planning opportunities for expats who structure pensions correctly through IORPs.

According to Jake McLaughlin, Director at deVere Portugal, Irish retirees in Portugal increasingly want cross-border pension solutions that allow them to take control of income streams in line with lifestyle goals.

“The demand here is tangible. Irish expats are highly informed, they’ve seen friends and colleagues trapped by restrictive Irish pension rules, and they want flexibility.

“We’re seeing strong flows into IORPs because they align with both Portugal’s tax system and the expectations of retirees who want choice rather than obligation.”

Why Malta, why now

Malta’s IORP II framework has become the gold standard within Europe. Enforced by the Malta Financial Services Authority and rooted in the EU’s IORP Directive, it ensures strict governance, transparency, and investor protection.

For expats, this means peace of mind. Assets are ring-fenced in trust, beneficiaries inherit efficiently, and funds can be drawn down in local currency where the retiree lives. Irish inheritance tax does not apply where neither the member nor the beneficiaries are Irish residents.

The flexibility is especially important in today’s climate. With inflation eroding returns and market volatility unnerving traditional pensioners, Irish expats are seeking structures that give them more control over timing and income strategy.

Malta allows phased withdrawals, lump sums, or annuity-style income, which are all tailored to personal needs.

Numbers that matter

Consider a €2 million pension pot. In Ireland, the maximum tax-free lump sum would be €200,000, with the remainder taxed aggressively, leaving beneficiaries exposed to further Irish inheritance tax if resident. In Malta, the same fund could release €600,000 tax-free in Malta, with no cap on fund size, and pass efficiently to heirs without Irish inheritance tax where neither member nor beneficiaries are Irish resident.

These differences are not technical footnotes. They represent life-changing sums, particularly for internationally mobile professionals who have accumulated significant pensions over decades.

James Green notes that Ireland’s smaller pension schemes are increasingly fragile compared to UK equivalents.

“Many Irish defined benefit schemes are under strain, employer covenants are weaker, and members face real risks of reduced payouts. This is accelerating the urgency to consider cross-border solutions before options narrow further.”

The Central Statistics Office estimates more than 650,000 Irish citizens live abroad in the EU and beyond. Portugal, Spain, France, and Germany are top choices within Europe, with Portugal seeing a steady inflow of Irish retirees since the 2010s.

For these expats, pensions are not just financial assets; they’re the bridge to security in later life. The mismatch between Ireland’s domestic pension framework and international living has become glaring, and the case for IORPs is no longer niche.

Challenges and considerations

Transferring a pension abroad is not without complexity. Personal pensions, PRSAs, and state pensions cannot be moved outside Ireland. Buy-Out Bonds and PRBs face restrictions, often limited to transfers within Ireland or the UK.

Every case requires careful evaluation of tax treaties, residency rules, and long-term financial planning.

Yet for many Irish citizens with occupational pensions — particularly those with pots above €200,000 — the case for exploring IORPs is compelling.

“The key is understanding your personal tax residence and how the double-tax treaties interact,” explains McLaughlin.

“That’s where Portugal-based expats are increasingly looking for advice. The rewards are substantial, but it must be done correctly.”

Legacy and control

Perhaps the most overlooked advantage of IORPs is succession planning. Under Irish rules, beneficiaries can face capital acquisitions tax at 33% above certain thresholds, unless exempt as a spouse.

Malta-based IORPs, however, are treated as non-Irish assets for non-residents, meaning heirs can often inherit without exposure to Irish inheritance tax.

In a Europe where wealth transfer is becoming as important as wealth accumulation, this flexibility is proving decisive.

Families want to preserve capital across generations, not lose swathes of it to poorly aligned tax codes.

This surge of transfers reflects a deeper truth about how Irish people abroad now view their financial futures.

For the growing community of Irish expats in Portugal, the pension is no longer just a pot to be drawn at home; it is an instrument of independence, portability, and long-term security.

There’s a clear choice of either keeping pensions constrained by the limits of the Irish system or unlocking the broader freedoms that IORPs make possible.

If you have questions, feel free to reach out to Jake here: jake.mclaughlin@devere-portugal.pt or book a complimentary discussion here: https://calendly.com/jake-mclaughlin/review