Brian Hayes (Dublin South West, Fine Gael)

Perhaps I will frame my remarks in the context of amendments Nos. 31 to 35, inclusive, with were tabled by Deputies Healy and Michael McGrath. Amendments Nos. 32 and 35 in the name of Deputy Healy seek to deny the treatment of the pension levy paid in respect of a pension scheme as a necessary disbursement from that scheme. A provision of this nature is important if the levy is to be effective. Without it, there is no clear statement with regard to where the legal instances of the tax fall. The omission of this part of the provision would seriously undermine the levy and render it inoperable. As a result, I do not propose to accept amendments Nos. 32 and 35. Amendments Nos. 31, 33, 34, 36 and 37 seek to deny an insurance company or pension scheme trustees the option to adjust current or future benefits of the pension scheme, or contract of insurance, to take account of the levy paid to this option. It is up to the trustees and administrators to decide whether, and how, the levy should be passed on, upon whom it should impact and to what extent, given the particular circumstances of the pension funds or pension plan for which they are responsible.

In the amendments I propose concerning this particular provision I seek to provide, in so far as I can, that where the option to reduce benefits is taken by the trustees of a pension scheme the imposition of the levy is not carried out in a disproportionate way. I referred to that in my discussion of amendment No. 30 and it is in so far as we can, given the practical difficulties concerned.

I indicated to the House and to the pension industry representatives that I take the view there is scope for the industry to absorb the impact of this temporary levy by way of a reduction in fees and charges made on these schemes. On Second Stage this matter was raised in a comprehensive way by my colleague from Dublin South, Deputy Peter Mathews, who referred to the fact that much of the imposition of the 0.6% levy could be absorbed by existing management fees which are often a multiple of that figure. It is a valid point. I wrote to the industry representatives in this regard and await their response. However, each pension scheme is different and it is a matter for the trustees of each scheme to determine the appropriate manner in which the levy will be paid. In the circumstances I cannot accept amendments Nos. 31 to 37.

I refer also to the Deputy's question about why the Pensions Board was not consulted about the introduction of the levy. I am informed that officials from the Department of Finance have been in contact with a wide number of interested parties in both the public and the private sector, including the Pensions Board, about practical, logistical and other issues surrounding the introduction of the levy. Those consultations and discussions have occurred and, along with discussions with the pensions industry, have helped form some of the amendments the Minister and I introduced today.

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