Finian McGrath
Question:72. Deputy Finian McGrath asked the Minister for Finance if he will re-examine the financial implications for pensioners of the pension levy. [47515/13]
View answerThursday, 7 November 2013
Questions (72)
Written answers
I announced in my recent Budget speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 will be abolished from the 31st of December 2014. I will however, introduce an additional levy on pension funds at 0.15%. I am doing this to continue to help fund the Jobs Initiative, including the continuation of the reduced 9% VAT rate detailed below and to make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties. The additional levy within the existing legal framework will apply to pension fund assets in 2014 and 2015. The pension fund levy imposes an annual stamp duty on the market value of assets under management in pension schemes approved by the Revenue Commissioners under Irish tax legislation.
The chargeable persons for the levy are the trustees or other persons (including insurance companies) with responsibility for the management of the assets of the pension schemes or plans. The payment of the levy is treated as a necessary expense of a pension scheme and the trustees or insurer, as appropriate, are entitled, where they decide to do so, to adjust current or prospective benefits payable under a scheme to take account of the levy. It is up to the trustees to decide whether and how the levy should be passed on and who should be impacted and to what extent, given the particular circumstances of the pension schemes for which they are responsible.
Individuals may be affected in different ways by the pension fund levy. I am not in a position to comment on what the precise impact of the levy will be in all cases on individuals or individual funds, schemes, members or retired members as this depends, for example, on whether and to what extent pension fund trustees and Life Offices decide to pass on the levy to individual members, given the particular circumstances of the pension funds or pension plans that they are responsible for.
However, should the option of reducing scheme benefits be taken, in no case may the reduction in an individual member’s or class of member’s benefits exceed the member’s or class of member’s share of the levy.