Levy on private pensions 'onerous'

 

The Government’s decision to place a levy on private pension funds to support its jobs initiative showed a lack of foresight, the Irish Insurance Federation said.

The federation described the levy as “onerous” and said that raiding private pension pots went against recent efforts to encourage people to save for their retirement.

“We urge the Government to support the efforts of the million plus ordinary workers who have been saving for retirement instead of imposing a levy that will discourage pension saving,” the federations chief executive Mike Kemp said.

Pensions firm Irish Life also said it was disappointed that ordinary workers attempting to save for retirement were being targeted to fund the initiative.

“We would urge the Minister [for Finance] to offer clarity around future policy on pension taxation and to reassure the million plus workers who are saving in pensions that he will continue to support them in their efforts to save for their retirement,” Irish Life chief executive Gerry Hassett said.

The Irish Congress of Trade Unions said the initiative included a number of promising proposals.

Congress assistant general secretary Sally Anne Kinahan said the measures should be seen as the beginning to a “concerted drive to create jobs and get people back to work”.

“Government must adopt a fairer approach to recovery and become more ambitious for Ireland and more ambitious for people if we are to create a genuine recovery,” she said.

Congress did say it was concerned that a proposal to impose a levy on pension funds may affect to support the measures could prove problematic as many pension funds were already in difficulty.

Small and medium enterprises body Isme welcomed the plan but said a more “comprehensive economic plan” which addressed the Government deficit, the total cost base and the banking crisis was required.

It said the VAT reduction and the changes in the travel tax should assist companies.

“The main issue of concern is that the jobs initiative is to be funded from a levy on private pension schemes,” Isme said. “This penalises those in the private sector who have acted prudently in providing for their retirement.”