John Halligan (Waterford, Independent)
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Question 97: To ask the Minister for Finance if he will clarify a matter (details supplied) regarding pensions. [29956/11]

Michael Noonan (Limerick City, Fine Gael)
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The stamp duty levy of 0.6% applies to the market value, on the valuation date, of assets under management in pension funds and pension plans approved under Irish tax legislation. I cannot say what the precise impact of the levy will be on individual funds, schemes or members as this depends on whether and to what extent pension fund trustees and Life Offices decide to pass on the levy to individual members, given the particular circumstances of the pension funds or pension plans that they are responsible for.

I can say that the Finance (No 2) Act 2011 provisions which introduced the levy include certain safeguards in this area. The payment of the levy is treated as a necessary expense of a scheme and the trustees or insurer, as appropriate, will be entitled where needed to adjust current or prospective benefits payable under a scheme to take account of the levy. However, should the option of reducing scheme benefits be taken, it must essentially be applied in an equitable fashion across the different classes of scheme members that could include active, deferred and retired members. In no case may the reduction in an individual member's or class of member's benefits exceed the member's or class of member's share of the levy.

The Revenue Commissioners are also afforded oversight authority to review, where they consider it appropriate, instances where benefits are adjusted as a result of the payment of the levy to ensure that any such adjustment is in keeping with the requirements of the levy legislation. In undertaking any such review Revenue may consult with appropriate experts as they see fit. However, before Revenue could act in that regard, instances of concern on foot of actual adjustments made would first have to be brought to their attention.

As regards the questionable basis for applying the levy, the levy is a relatively small charge on the significant assets of pension funds, much of which are represented by investments outside of Ireland. As the legislation introducing the levy makes clear, it is for a temporary four year period only and pension funds are being asked to make a contribution to getting the domestic economy moving again over that period. This is a reasonable and targeted tax measure being introduced to fund the various measures set out in the Jobs Initiative. The country is facing an economic and unemployment crisis and the Jobs Initiative will help tackle that crisis and applying a temporary levy to pension funds is less damaging economically than raising other taxes.