Michael McGrath (Cork South Central, Fianna Fail)
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Question 123: To ask the Minister for Finance if he will respond to correspondence (details supplied) regarding the pension levy. [34365/11]

Michael Noonan (Limerick City, Fine Gael)
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In the matter of statements being made to the effect that the pension fund levy could lead to a reduction of 10% in the pensions paid from schemes to the retired members of such schemes, I received copies of correspondence issued by the trustees of a certain scheme during the summer indicating that potential reductions of this scale and of a lesser scale were under consideration. I have recently received a copy of further correspondence issued on behalf of the trustees of that scheme stating that pension payments will, in fact, be reduced by 0.6% from 2012 and by the same percentage each year until 2015. As regards the impact of the levy on the individual outlined in the details supplied with the Deputy's question, I am not in a position to comment although it would appear from the details that the individual is not yet retired.

Where the accrued benefits under a defined benefit pension scheme have been reduced as a result of the levy (or for any other reason), my understanding is that the annual benefit statement should show the effect on pension accrued to date. Of course, if the trustees of the scheme have not yet decided whether to reduce benefits, no change would be shown.

I further understand that there is no obligation on PRSA providers or on defined contribution scheme trustees to inform contributors specifically of the effect of any reduction in pension fund values on foot of the pension fund levy but that the annual benefit statement would show the fund value after the effect of the levy in such cases.

There may be a case that the Statements of Reasonable Projection (SRP) for PRSAs should be adjusted to reflect the effect of the levy. This is a matter for the Pensions Board who, I understand, are aware of the issue. However, it should be recognised that the SRP is an estimate only, and in any event, the final fund value will be different from the projection.