Michael McGrath (Cork South Central, Fianna Fail)
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26. To ask the Minister for Finance if his attention has been drawn to the additional funds raised from the increased pension fund levy in 2014 and 2015 which in his budget statement he said were required to make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties; the circumstances in which such a call would arise; and if he will make a statement on the matter. [37060/14]

Michael Noonan (Limerick City, Fine Gael)
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I announced in my Budget 2014 speech that the 0.6% Pension Fund Levy introduced to fund the Jobs Initiative in 2011 would be abolished from the 31st of December 2014. I did, however, introduce an additional levy on pension funds at 0.15% for 2014 and 2015. I did this to continue to help fund the Jobs Initiative and also to help make provision for potential State liabilities which may emerge from difficulties facing pension funds.

The reduced VAT rate of 9% on tourism and certain other services was one of the very significant and successful measures introduced by the Jobs Initiative. It was due to end in 2013. In my Budget 2014 speech I announced the continuation of the reduced 9% VAT rate. I also announced that the Air Travel Tax is being reduced to zero with effect from 1 April 2014. The 9% VAT rate has helped to create thousands of new jobs as well as protecting existing jobs. Since the Budget announcement about the reduction in the Air Travel Tax, airlines have announced the opening up of new routes resulting in significant increases in passenger numbers with the associated increase in tourism activity and employment.

I also said in my Budget 2014 speech that the additional 0.15% levy for 2014 and 2015 would be used to help make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties, although funds from the levy would not be hypothecated or specifically set aside for this purpose. The Government decided that such liabilities will be met by the Exchequer as they arise.

I am advised by the Minister for Social Protection that the drawdown of funds to meet existing or future pension fund difficulties will only arise in the event of the wind up of a defined benefit pension scheme, where the employer is insolvent and there are not sufficient funds in the scheme to meet 50% of the liabilities of the scheme in respect of all scheme members or up to €12,000 of pensioner liabilities.