Mr. Aidan McLoughlin:

Tax relief on pensions is a misnomer because all benefits are ultimately taxed, bar the tax-free lump sum. The only State subsidy is the tax-free lump sum, the rest is fully taxed. The figures are calculated on the basis that if I promise to give Ciarán €100 at the end of the week, the State is assuming it has a right to take €52 because I have made him the promise, and another €52 when I give him the €100. That is a total tax rate of 104%, so the numbers are false. We have discussed it with the officials involved who said the numbers were being misquoted. However, there is not a €2.9 billion subsidy there, far from it.

A point was also raised about the advice we are given. In view of this, the feedback from our members is that for the first time in their careers many of them with 30 or 40 years' experience are at the point where they are challenged to advise people to get a pension. They are not convinced that it is in their long-term interest to join a pension scheme. That is a frightening thought given all we have discussed here. Simply because of that, they cannot say that the system can be trusted for the next 20 or 30 years that it will do right by them. I cannot tell people that they are not safer with that money in their own pockets. Without the tax relief that is notionally supposed to be there, and all the systems and protections that are supposed to be there, that doubt is in the minds of advisors at this point in time. That is the position we are in.

It is worth noting that the report the Minister commissioned on charges identified that Ireland offers as good or better value for money than is currently available in the UK, despite being a much smaller economic market. Comparing his experience in Canada and the United States, the chief executive of Irish Life recently said that the value for money is there. However, the issue of charges can be improved upon. We believe that some form of measurement system, like total expense ratios to give clarity of charges to people, would be important. It is not the fundamental issue concerning the problem with pensions, however.

As regards the potential for some form of penalty on exiting DB schemes, my fear is that while it is a good notion it is almost too late to implement it. As Mr. Whelan said earlier, we lost 25% of all DB schemes in the last year. Of the schemes that are left, about two thirds of workers in them are in schemes that are exempt from the funding standard anyway. Therefore they are already out from under the funding standard. Only a small fraction of those left in DB schemes are subject to the funding standard. The economic crisis itself is arriving at a solution but, unfortunately, that solution is the termination of all DB schemes that are subject to the funding standard.

A question was asked about whether the levy was paid by others. Certainly from my own experience, there is no overall record to say who is paying the levy. All that Revenue will know is that the levy was paid by somebody. As regards schemes in which we are involved, employers were asked whether they wished to pay the levy. In some instances they did, while in others they did not on the basis that they were not even able to pay what they were supposed to put into the pension contributions in the first place.

The suggestion was made that perhaps the industry itself could pay the levy out of its profits. That did not happen in any instance and it was not a surprise. I would have been party to that, as a trustee of the scheme. It is worth bearing in mind that in terms of inflow, the industry experienced a 60% fall in income from 2007 to 2011. At a time when some of the major players were being supported by the State, it did not seem logical that they would have so much fat there that the levy could be imposed and paid at that time. It was not paid by industry participants and in some instances it would have been paid by employers. In most cases, particularly with DC, it became a cost on the fund and was borne by members of the scheme.