Brendan Griffin (Kerry South, Fine Gael)
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Question 63: To ask the Minister for Finance his views on a matter (details supplied) regarding private pensions; his further views that it is justifiable to be targeting any one individual for such an amount; if he can provide any reassurance to the person regarding their personal circumstances; and if he will make a statement on the matter. [36540/11]

Michael Noonan (Limerick City, Fine Gael)
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A 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. 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 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.

Individuals may be affected in different ways by the pension fund levy. 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, for example, 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.

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.