Brendan Howlin (Wexford, Labour) | Oireachtas source

I will provide the committee with a comprehensive note on the matter. It sounds complicated but it is exactly as the Deputy has indicated. It is Government policy that significant pension pots shall be liable for tax. The threshold was very large under the former regime. People could accumulate an extraordinarily large pension pot on a tax-free basis, that is, subsidised by the taxpayer. We have reduced that substantially for the private sector and an analogous reduction has to be made for the public sector.

Under the Act, once the liability crystallises, it falls to the fund to pay. If, for example, Deputy Sean Fleming is entitled to a pension of that scale - please God, in due course - he could decide whether, in accordance with the Act, the fund should pay the tax and the tax would be rebated out of his pension entitlements over a period of 20 years.

In regard to the estimate of €1 million, it is not a token figure. I am advised that five individuals are anticipated to come within this category, and there is also contingency for three higher paid civil servants with chargeable excesses in or around €150,000. In each case, the individuals concerned would be opting to repay the relevant amount over the full 20-year period. If they take the option of taking a reduced pension payment over the qualifying 20-year period rather than paying the tax out of their lump sums, that is the sum of money for which the trustees - my Department in this case - are liable.