Dáil Éireann Debate, Tuesday - 19 June 2018
158. Deputy Peter Burke asked the Minister for Finance when it is envisaged to terminate the pension levy in view of the fact that four years was its original timeframe; and if he will make a statement on the matter. [26701/18]
Amharc ar fhreagra159. Deputy Peter Burke asked the Minister for Finance the areas to which revenue raised from the pension levy is allocated; and if he will make a statement on the matter. [26702/18]
Amharc ar fhreagraI propose to take Questions Nos. 158 and 159 together.
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 was treated as a necessary expense of a pension scheme and the trustees or insurer, as appropriate, were entitled where needed to adjust current or prospective benefits payable under a scheme to take account of the levy. It was up to the trustees or insurer to decide whether, when and how the levy was passed on and to what extent, given the particular circumstances of the pension schemes for which they are responsible.
The legislation also included safeguards aimed at ensuring that should the option of reducing scheme benefits be taken, it was applied in an equitable fashion across the different classes of scheme members that could include active, deferred and retired members. In no case could 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.
The Pension Scheme Levy has ceased since 2015.
Revenues raised from the Pension Levy were not hypothecated and formed part of the Exchequer. When introduced by the previous Government, it was announced that the equivalent of the funds raised from the levy would be used to fund the tax reductions and expenditure measures introduced in the Jobs Initiative.
