OPPOSITION TO a levy on private pensions which is expected to be announced by the Minister for Finance next week to fund a jobs initiative continued to mount yesterday, with the proposals being criticised as “short-sighted, arbitrary and unfair”.
The Government is proposing to introduce a levy of up to 0.6 per cent on private pension funds for the next four years, which it hopes will raise €450 million a year.
The Irish Congress of Trade Unions said yesterday the levy “makes no sense” and warned it could cause further problems “for already troubled schemes”.
An Ictu spokesman said pension funds should be helped to invest their funds in Ireland rather than overseas “as this would have a far bigger impact on job creation”. Fergus Whelan said the levy made no sense “when many funds are in difficulty because their liabilities exceed their assets”.
He said pension funds comprised some €72 billion that belonged to people working in Ireland, and most of it was invested abroad. “Congress believes that a way should be found to facilitate and enhance investment prospects here at home,” he said.
Pension experts Mercer also expressed concern about the plans, which it described as short-sighted, arbitrary and unfair.
Aisling Kennedy, a consultant with the company, said jobs and pension savings should both be prioritised, not one at the expense of the other.
“Given the budgetary pressures that Ireland faces in the future as a result of an ageing population, the Government should be encouraging more pension saving instead of a ‘smash-and-grab’ on the savings that individuals and their employers have already set aside for the future,” she said.
She said pension schemes were already in difficulty due to the impact of the financial crisis on fund values. The proposed levy will further jeopardise existing pension schemes and discourage new pension savings, she said.
