Michael McCarthy
Ceist:216. Deputy Michael McCarthy asked the Minister for Finance his views on correspondence (details supplied) regarding a pension scheme; and if he will make a statement on the matter. [46893/15]
Amharc ar fhreagraWednesday, 13 January 2016
Ceisteanna (216, 218)
Ciaran Lynch
Ceist:218. Deputy Ciarán Lynch asked the Minister for Finance if he will reverse the effects of the pension levy (details supplied); and if he will make a statement on the matter. [46898/15]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 216 and 218 together.
The original 0.6% levy ended in 2014 and the additional levy of 0.15% for 2014 and 2015 ended last year. No pension fund levy will be applied for 2016 or is planned for future years.
In both cases the details supplied refer to a particular pension scheme. Two arguments are made in relation to this scheme. The first is that the deficit in the scheme's fund has been made worse by the levies. The second is that members of the scheme have had their pensions reduced as a result of the levies.
The chargeable persons for the levies are the trustees or other persons (including insurance companies) responsible for the management of the assets of the pension schemes or plans. The payment of the levies 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 levies. It is up to the trustees to decide whether and how the levies 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.
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 levies.
If it is the case that the trustees of the scheme in question have chosen to pass on the cost of the levies then, to the extent to which they have done so, any deficit which the scheme was carrying will not have been increased as a result of the levies.
It is not the case, as suggested in the details supplied, that any part of the levies will be due for payment in 2016. The payment date for the final part of the 0.15% levy was the 25th of September 2015.
In the details supplied it is suggested to return money collected through the levies "in line with the return of money to retired public servants". While public service pensions are not fund-based and so have not been subject to the pension fund levies, serving and retired public servants have been subject to the Pension Related Deduction (PRD) and Public Service Pension Reduction (PSPR) as appropriate, reducing, respectively, salaries and pension payments. While changes to the PRD and PSPR are proposed to start from this year which will result in reductions in the PRD and the PSPR, particularly affecting public servants on low and middle incomes and retired public servants in receipt of low pensions, there is no provision for the repayment of PRD or PSPR deductions which have already been made.
I have no plans to repay the pension fund levy tax collected as suggested in the details supplied. The value of the funds raised by way of the levies have been used on reduced tax and increased expenditure measures as part of the Jobs Initiative to protect and create jobs and this has helped to create the improving financial and economic position of the State. Taxpayers to whom the impact of the levies may have been passed on by the chargeable persons for the levies will benefit from the changes which I began in Budget 2015 and continued in Budget 2016 to reduce the tax burden on low and middle income earners.
Finally, it is not necessary, as suggested, to rescind the legislation which enabled the levies as it was explicitly time-bound and no longer applies.