Michael Noonan (Limerick City, Fine Gael)

I move amendment No. 9:

In page 6, to delete lines 3 to 32 and substitute the following:

" 'chargeable amount', in relation to a chargeable person and any assets, means the aggregate market value of the assets (other than an asset that is land, in which case the market value of the land shall be taken as not including the amount of any outstanding borrowings used to acquire the land)—

(a) on 30 June for the year 2011, 2012, 2013 or 2014, as the case may be, or

(b) where the assets are not contracts of assurance and are held for the purposes of a scheme of a kind described in paragraph (a) of the definition of 'scheme' that is a defined benefit scheme or a one member scheme and the chargeable person so decides, and where accounts are prepared to an appropriate accounting standard, on the last day of the accounting period of the scheme ended in the period of 12 months immediately preceding 30 June of the year 2011, 2012, 2013 or 2014, as the case may be,

and in respect of which the chargeable person is the administrator or insurer on the date concerned;".

I am providing in amendment No. 9 for a single valuation date in relation to most pension funds assets for each of the four years of the levy, as compared with a choice of valuation date provided for in the Bill as published. In addition, I propose to push back the valuation date to 30 June in each of the four years. Linked to these changes, amendment No.12 also provides for a single payment date of 25 September for all years, as opposed to the two payment dates in each year originally envisaged when amendment No. 13 simply deleted the definition of a first due date which is now superfluous.

Amendment No. 20 provides for the delivery of the levy statement by electronic means. In line with the proposed single payment date, amendment No. 22 sets the rate of the levy at 0.6% of the chargeable amount, as opposed to two payments of 0.3%.

In summary, therefore, assets held in the form of contracts of assurance and all defined contribution occupational pension schemes assets will be valued for levy purposes on a fixed date of 30 June in each of the years 2011, 2012, 2013 and 2014. The levy will be due and payable at the rate of 0.6% of the asset values on 25 September in each of those years. The exception to the fixed valuation date will be the retention of a choice between the valuation of scheme assets on 30 June in each year and their valuation at the most recent scheme accounting date in the preceding 12 months but only for the assets of defined benefit occupational pension schemes and small self-administered schemes where these schemes do not hold their assets in the form of contracts of assurance. This is at the request of the industry, obviously.

The definition of defined benefit scheme and one-member scheme are included in amendments Nos. 11 and 15, respectively. These changes reflect the discussions with the pensions industry and are considered necessary to facilitate a more efficient implementation and collection process for the levy and to minimise the administrative cost burden on the industry from collecting the levy.

Amendment No. 11 expands the definition of contracts of assurance to make it clear that it includes not only contracts of assurance linked to the pensions business undertaken by a pension scheme with life assurance companies, but also encompasses policies of contracts of assurance linked to what is called investment-only business with such companies.

Many retirement benefit scheme trustees, particularly in relation to smaller pension schemes, insure the risks associated with the scheme in whole or in part with life assurance companies. Apart from this specific pension-type business, where the insurance contract corresponds with particular liabilities of the scheme, trustees of pension schemes may as part of their investment portfolios invest directly in assets such as equities and Government stocks or in unit link funds operated by investment managers, including insurance companies. With a view to ensuring that there is clarity as to who the chargeable person is in relation to contracts of assurance generally, it is considered that the responsibility for paying the levy in respect of investment-only type business with insurers should also fall within the responsibility of the life companies rather than the pension scheme trustees or administrators. Amendment No. 11 puts this beyond doubt. The only exception to this is in relation to one-member small self-administered schemes who hold trustee investment plans with life offices. The case has been made to me that in such cases the trustees of the scheme should remain responsible for the levy.

Following on from the foregoing, amendment No. 15 includes a definition of one-member scheme, as already mentioned, and expands the definition of pension fund in relation to an insurer to include investment-only business.

Amendment No. 19 includes a definition of valuation date which is required later in connection with amendment No. 30.

I commend amendments Nos. 9, 11 to 13, inclusive, 15, 19, 20 and 22, to the Committee. Amendment No. 23 is to be moved by Deputy Sean Fleming.

See this speech in context