Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Deputy. In terms of the tax treatment of supplementary pensions, as the Deputy is aware, Ireland operates an exempt-exempt-taxed, EET, system that is very similar to the majority of OECD countries. This means contributions to pensions are exempted from income tax, subject to certain limitations, and that pension fund gains are exempted from income tax but income from pension drawdown is taxed. Where data is available regarding the Exchequer cost of tax relief for pensions, the data is publicly available and included in Revenue’s publication on the cost of tax expenditures as well as in the Department of Finance tax expenditure report.

With regard to distributional analysis, I am advised by Revenue that prior to the introduction of real-time reporting on 1 January 2019, pension contributions were reported to Revenue at an employer level rather than an employee level. As the Deputy is aware, while there were some delays in the processing and publication of this 2019 data, it has now been published and a detailed breakdown of pension contributions and the cost of the tax relief is available.

Analysis by Revenue of the 2019 figures indicates that pension deductions by employees and employers totalled €2.5 billion and €2 billion, respectively, in 2019. This include contributions to occupational pensions, additional voluntary contributions, AVC, contributions to personal retirement savings accounts, PRSA, and contributions to retirement annuity contracts, RAC. On average, 775,000 people were making pension contributions every month. I acknowledge the need for clear data in this area, however. The interdepartmental pensions reform and taxation group, which reported in November 2020, was tasked with a number of actions relating to the pensions roadmap, including proposals aimed at simplifying and harmonising the supplementary pension landscape and an assessment of the cost of State support for pension savings.

I acknowledge the importance of the issues raised by Deputy Pearse Doherty and the importance of data in informing the debate that is under way. I checked with my officials when the Deputy raised these issues. I understand that the table showing the breakdown of pension contributions is available on an annual basis. If the Deputy has any further information needs that are available to help inform analysis of this matter, I will definitely do my best to make that data available to him. The interdepartmental group I referred to on a number of occasions is now examining the issue of how we can best make data available on tax reliefs. I will ask that this work is prioritised in order that we are in a position to better inform the debate that is under way on this policy area.