As you are aware, the Minister for Finance highlighted in Budget 2014 that the 0.6% levy which has been in place on all schemes since 2010 will terminate at the end of 2014. The Minister for Finance also announced that a separate levy of 0.15% will apply to all pension fund assets to continue to help fund the Jobs Initiative, including the continuation of the reduced 9% VAT rate in the hospitality sector and to make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties.
Any requirement relating to a State liability arising in relation to pension provision will only apply to defined benefit pension schemes in a situations where both the employer and the pension scheme is insolvent (double insolvency). It will not apply to schemes where the employer is solvent. The provisions in the Social Welfare and Pensions (No.2) Act 2013 in relation to a double insolvency provide for a draw of monies from the Exchequer where the resources of the scheme are not sufficient to meet 50% of expected scheme benefits.
I must stress that I am not aware of any double insolvencies 'in the pipeline' at the moment. I see the provisions in the recent legislation as providing a form of insurance and it is not expected that there will be a significant draw on contingency funds available. Rather, the regulatory measures in the Social Welfare and Pensions Act (No.2) 2013 are intended to move underfunded schemes towards an appropriate funding position and further minimise risk requirements to utilise funds raised through the pension levy. In relation to any costs arising before the enactment of the recent legislation, this matter will be considered and determined by the High Court.