Dáil Éireann Debate, Tuesday - 25 October 2016
174. Deputy Peter Fitzpatrick asked the Minister for Finance to explain the reason a pension fund (details supplied) continues to deduct the pension levy in respect of pensions paid to members; if the said levy deductions are being paid to the Revenue Commissioners; and if he will make a statement on the matter. [31694/16]
View answerI am advised by Revenue that the Pension Scheme Levy was introduced in 2011. For the years 2011, 2012 and 2013 the rate was 0.60% of the scheme assets. For the year 2014 the rate was 0.75% of the assets and for the year 2015, the final year of the levy, the rate was 0.15%. 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 or insurer 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 should the option of reducing scheme benefits be taken, it must be applied in an equitable fashion across the different classes of scheme members that could include active, deferred and retired members. 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. Where pension scheme trustees or an insurer took the decision to treat the levy as an expense of the pension scheme, they would have adjusted current or prospective benefits payable to members under that scheme. The consequence of this treatment by the trustees or insurer could be a permanent reduction in members' benefits.
In these circumstances there is no question of anything being paid to Revenue as any permanent reduction in benefits paid to members reflects the application of the levy to the fund in question over the period in which the levy applied.
