Will the pension fund tax apply to public sector funded DB schemes such as ESB, Bord na Mona, Bord Gas etc? Some of these funds are in defecit.Levy Proposal
Note to the Editor
- An annual levy of between 0.5% and 0.6% of the pension scheme assets of all pension savers including savings in occupational defined benefit and defined contribution schemes, approved retirement funds, retirement annuity contracts and PRSAs.
- This levy will be applied for a minimum period of 4 years from 2011 to 2014 and is intended to raise €450 million per annum over this period.
- The Government intends to enact new legislation which will permit the benefits of pensioners in defined benefit pension schemes to be cut.
- This measure is solely being targeted at private sector pension savers - there will be no levy on long term savings accumulated through other vehicles or the benefits provided to members of unfunded schemes including the €130b of public sector pension's commitments. The proposal appears to completely exempt these groups for this new tax.
About IAPF
Established in 1973, the Irish Association of Pension Funds (IAPF) is a non- profit, non-commercial organisation whose aim is to promote financial security for all retired people.
Presumably the proposed Levy will apply to funded semi-state schemes (such as ESB etc).
..which if implemented will undermine the entire rationale behind saving for retirement.
I think you are confusing deficit/surplus with assets.
Plenty of DB Schemes have liabilities in excess of their assets - but they all have assets, and substantial ones.
This tax is a disgrace, is there any guarantee they will still not implement the reduction in tax relief over the next few years in addition?
Michael Noonan will provide full details on Tuesday.
Further thoughts
If this is to be applied fairly to DB members, this is what will be required.
Existing pensioners: 0.5% reduction in pension for 4 years
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