Terence Flanagan (Dublin North East, Fine Gael)
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Question 52: To ask the Minister for Finance if he will respond to correspondence (details supplied) regarding the pensions levy; and if he will make a statement on the matter. [33737/11]

Terence Flanagan (Dublin North East, Fine Gael)
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Question 56: To ask the Minister for Finance if he will respond to correspondence (details supplied) regarding jobs and taxes; and if he will make a statement on the matter. [33873/11]

Terence Flanagan (Dublin North East, Fine Gael)
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Question 58: To ask the Minister for Finance if he will respond to correspondence (details supplied) regarding the pensions levy; and if he will make a statement on the matter. [33877/11]

Terence Flanagan (Dublin North East, Fine Gael)
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Question 61: To ask the Minister for Finance his views on a matter (details supplied) regarding the pensions levy; and if he will make a statement on the matter. [33898/11]

Terence Flanagan (Dublin North East, Fine Gael)
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Question 62: To ask the Minister for Finance his views on a matter (details supplied) regarding the pensions levy; and if he will make a statement on the matter. [33900/11]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 52, 56, 58, 61 and 62 together.

I would very much hope that individuals already saving for their retirement and those considering doing so would not be unduly influenced in a negative way by the pension fund levy. The levy is a charge for a temporary period on the significant assets of pension funds, much of which are represented by investments outside of Ireland. The Finance (No.2) Act 2011 legislation which gives effect to the pension fund levy provisions makes clear that it is to apply for a four year period only.

The moneys raised from the pension fund levy is being used to pay for the tax reductions, including VAT and PRSI reductions, and the additional expenditure measures announced in the Jobs Initiative in May last. There are timing differences as between the receipt of moneys from the levy and the measures which the levy will fund but the Jobs Initiative is designed to be budgetary neutral over the 4 year period 2011-2014.

The various measures in the Initiative represent the first steps by this Government towards improving the competitiveness of important sectors of the economy and facilitating the return to work of people currently unemployed. The levy 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.

As regards speculation that the Government would now proceed to "raid" investment funds or deposit accounts, I want to assure you that the Government has no plans whatsoever in this regard. The Government regards it as its top priority to safeguard the security of savings and would not wish to consider any step that would impact negatively upon confidence in this area. Other savings or investment products have not benefited from the generous tax reliefs that pension savings have historically been granted and continue to receive. Deposit accounts and savings products have already been subjected to additional taxation in recent budgets, via the increase in the rate of DIRT and exit taxes, neither of which impacted on pension funds. There is the view that tax relief on contributions to pension saving is simply tax deferred and that such reliefs are balanced by the eventual taxation of pension benefits over the period of payment of the pension.

While I understand this view to a point, these matters are not always so clear cut. For example, while individuals will get tax relief at the marginal rate on their pension contributions out of pre-retirement income, the tax liability on their retirement benefits will be impacted by issues such as the tax-free retirement lump sum and the level of post –retirement income.

Individuals may be affected in different ways by the pension fund levy. However, I am not in a position to comment on what the precise impact of the levy will be in all cases on individuals or individual funds, schemes, members or retired 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 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 given authority to review any case where assets are disposed of by administrators or trustees in order to pay the levy so as to ensure that any such disposals are in keeping with or needed to pay 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.