Dáil Éireann Debate, Thursday - 11 December 2014
61. Deputy Pearse Doherty asked the Minister for Finance his views on a pension fund-trust which has already paid the pension levy warning its members that it may now apply a charge to their pensions retrospectively to cover the levy (details supplied); and if he will make a statement on the matter. [47500/14]
View answerI am advised by the Revenue Commissioners that the pension fund levy applies to the market value, on the valuation date (generally 30 June each year) of assets under management in pension funds and pension plans approved under Irish Tax legislation. The person responsible for payment of the levy is the "chargeable person" as defined in the legislation.
The chargeable person, as respects pension scheme assets held under contracts of assurance, is the insurer, and as respects other scheme assets is the administrator of the pension scheme. The administrator is defined in the relevant legislation as meaning the trustees or other persons having the management of the assets of the scheme.
Under the legislation, 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 needed 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, when and how the levy should be passed on and to what extent, given the particular circumstances of the pension schemes for which they are responsible.
However, the legislation also includes safeguards aimed at ensuring that benefits payable, either currently or prospectively to any member, are adjusted in such a way that the reduction in value of those benefits shall not exceed the appropriate percentage ( 0.6%, 0.75% or 0.15% depending on the year involved) of the market value of the assets accounting for the scheme's liabilities to that member.
I am not in a position to comment on the specific details of the letter. However, it would appear from the information submitted that the pension scheme members' AVCs have already been adjusted to reflect the pension levy paid by the trustees in respect of those funds. As regards the members' defined benefit scheme, it appears from the correspondence that the trustees are not proposing to make any adjustment to members' benefits at this point in time in respect of the levy payments on the defined benefit scheme assets but rather are pointing out to members that such adjustments may be necessary in the future depending on the financial performance of the scheme over the next two years. I would assume that before arriving at any decision on this matter the trustees will have taken appropriate professional advice.
