Dáil Éireann Debate, Tuesday - 24 January 2023
233. Deputy Michael McNamara asked the Minister for Finance if he has any plans to abolish the Government pension levy introduced in tandem with the jobs initiative in 2011, as the jobs initiative has now concluded; and if he will make a statement on the matter. [2890/23]
View answerAs the Deputy is aware the Pension Levy on Private Funds was introduced in the wake of the financial crash and at a time when the economy was in serious difficulties. The intent of the levy was to raise revenue in respect of the generous tax reliefs that those contributing to pension arrangements had benefited from over many years.
The levy on pension funds was provided for in section 125B of the Stamp Duties Consolidation Act 1999 (as inserted by section 4 of "the 2011 Finance (No. 2) Act"). It was charged on the market value of assets in pension schemes held on 30 June in each year, at a rate of 0.6% (2011 to 2013), 0.75% (2014) and 0.15% (2015). Liability for the levy rested with trustees of pension schemes and others responsible for the management of pension fund assets.
It is important to note that this levy was discontinued from 2016.
Under the legislation, the payment of the levy was treated as a necessary expense of a pension scheme and it was a matter for the trustees or insurers to decide when and how the levy should be passed on to scheme members and to what extent, given the particular circumstances of the pension schemes for which they are responsible. I have no detailed information on the decisions made by pension fund trustees or others in relation to the passing on of the full or a partial impact of the levy to the current, deferred or former (retired) members of pension schemes. I am aware, however, that where trustees have made the decision to pass on the impact or part of the impact of the levy to pensioners that a smaller reduction in pension payments over the lifetime of the pension may have been made in many cases in preference to a larger reduction over a shorter period.
The value of the funds raised by way of the levies have been used to protect and create jobs and this has helped to support the improved financial and economic position of the State.
