Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Question 28: To ask the Minister for Finance if he will respond to concerns raised regarding the temporary pension scheme levy (details supplied) in County Cavan; and if he will make a statement on the matter. [31741/11]

Michael Noonan (Limerick City, Fine Gael)
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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.

I consider that there is scope for the pension fund industry to absorb the impact of the temporary pension scheme levy by way of a reduction in the fees and charges made on those schemes. As outlined in the details supplied with the question, I have raised this issue at face-to-face meetings with representatives of pensions industry and in writing. The response from the industry has to date not been particularly positive in this respect. I am not sure, however, that forcing the industry to absorb the levy through legislation regardless of the circumstances from case to case would be the most appropriate action at this time.

I should point out that a group has been established to examine charges in the pensions industry. The group is chaired by the Department of Social Protection with representatives of the Central Bank and the Pensions Board. This study will provide an initial benchmark on the level of pension charges for different forms of funded supplementary pension arrangements and will provide information in relation to disclosure of charges. These data have not been available to date so the study will provide valuable information to inform policy. When this information on pension charges becomes available, I will consider how it may be used to advance the issue of the industry absorbing the impact of the pension fund levy.