Pensions Levy abolished as promised - then reintroduced

[Alexmartin]

Sickening.
Looks like gambling is the most tax efficient form of saving now.

 

[kateball]

I agree, Purple - this pilfering of private assets is plain wrong. It almost
sounds unconstitutional. From an optics view point, would they be
better off reducing the tax relief avaiable on pension contributions? That's not a rhetorical
question.

Surely the people who suffer most with the 0.6% levy were the biggest beneficiaries of the tax reliefs of the last 20/30 years when tax relief on pension contributions was as much as 60% or more!?

Tax relief on pension contributions has already been cut by 1/3 ( 41%) so why would you encourage a further reduction? We should be encouraging not discouraging younger generations to plan for their future?

There is so much emotive talk about the pension levy - its not theft its a tax - get over it!

 

[Homer]

The stupidity of this measure beggars belief. The minister gave a firm commitment less than a year ago that the levy would cease after 2014. How can we ever trust ANY reassurances he gives from now on.

Many underfunded DB schemes cannot afford to pay the levy and have had to reduce benefits to cover the cost of paying it. The rules regarding how benefits in a DB scheme can be reduced because of the levy are unnecessarily complex (no surprise there) and the cost of administering these reductions is an additional burden on schemes that are already struggling.

With a fixed four year timeframe, schemes could decide to defer applying the reduction for benefits that had not yet come into payment and just apply a single reduction at the end of the four years. Many schemes have chosen to do just that. With this extension, that approach goes out the window, as the Minister's failure to keep his promise means that pension scheme trustees can no longer base their procedures on a fixed time period.

What a shambles!

 

[Evander73]

Kateball, I wasn't advocating reducing tax relief on pension contributions. I was just wondering if there was a fiscal reason why the Government choose this more emotive and less politically palatable option. A new tax/levy generally causes more adverse reaction than tinkering with the rate on an existing relief.

Also, I believe people get so emotional about this levy because they see it as the Government taking away a tangible asset they have worked to accumulate, whereas a reduction in tax relief is a less intrusive intervention, and could have been spun as "we're just not giving you as much free money as we used to".

I fully agree that people should be encouraged and incentivised to invests in pensions.

 

[Ravima]

This is simple THEFT, similar to the THEFT of bank accounts in Cyprus.

 

[Knuttell]

This is simple THEFT, similar to the THEFT of bank accounts in Cyprus.

Noonan must be licking his lips in anticipation of a proper raid on peoples savings in order to fund this welfare state.This should almost be reported to the Gardai,its theft pure and simple...by the State.

 

[Duke of Marmalade]

A bit surprised at the outrage. In relative terms pension funds have got off light. The 41% DIRT and Exit Tax make investment outside a pension fund very unattractive by comparison. My guess is that this levy will differ form the "temporary" levy in the following ways:

It will make no pretence at being temporary

I don't think the legislation will allow DB schemes to pass on the effects in reduced benefits

I think it will apply to ARFs

Let's see

 

[Palerider]

[QUOTE=Duke of Marmalade;

I don't think the legislation will allow DB schemes to pass on the effects in reduced benefits

My deferred DB pension is being reduced each time the .6% is applied so yes it is passed directly to the person that has paid into it for decades, not just deferred, existing members and serving staffs entitlements also just to clarify.

 

[Duke of Marmalade]

I don't think the legislation will allow DB schemes to pass on the effects in reduced benefits

My deferred DB pension is being reduced each time the .6% is applied so yes it is passed directly to the person that has paid into it for decades, not just deferred, existing members and serving staffs entitlements also just to clarify.

You miss my point. It was recognised that the 0.6% was OTT for poorly funded schemes and the legislation surprisingly changed the existing rules of decades by allowing Trustees to reduce benefits. My guess is that this 0.15% will be deemed to be small enough not to repeat that facility for Trustees.

 

[Seagull]

You miss my point. It was recognised that the 0.6% was OTT for poorly funded schemes and the legislation surprisingly changed the existing rules of decades by allowing Trustees to reduce benefits. My guess is that this 0.15% will be deemed to be small enough not to repeat that facility for Trustees.

If that's the case, then the argument would be that the DB pension is overfunded. If DC pensions are going to be reduced by the pot being raided, then surely DB pensions should also be reduced in the same way.

 

[Azriel]

I would agree for different reasons - it is likely easiest to leave the legislation as is in terms of passing on the pension levy to members of Defined Benefit schemes via a reduction in benefits. We are only talking about the ability to pass on the impact of the pension levy - there is of course no requirement to pass it on.