Wednesday, 6 November 2019
Department of Finance
77. To ask the Minister for Finance the reason for imposing a levy on private pensions; if this levy can now be reviewed having regard to the changed economic circumstances; if he will consider abolishing it; and if he will make a statement on the matter. [45692/19]
The pension fund levy was introduced in 2011 in the wake of the financial crisis and at a time when the economy was in serious difficulties. The levy was designed to claw back a small amount of the very generous tax reliefs that those contributing to pension arrangements had benefitted from over many years. The levy went to fund the tax reductions and expenditure measures introduced in the Jobs Initiative, including lowering the VAT rate for the tourism sector to 9%.
The levy was successful, as reflected in the increased activity and employment in that sector. The trustees of pension schemes affected by the levy had the option of adjusting current or prospective scheme benefits to take account of the levies, which included the possibility of reducing future retirement benefits.
For the years 2011, 2012 and 2013 the rate was 0.60% of the pension scheme assets. For the year 2014 the rate was 0.75% of the assets and for the year 2015, the final year of the levy, the rate was 0.15%. The levy has ceased since 2015.
The value of the funds raised by way of the levies have been used to protect and create jobs and this has helped to create the improving financial and economic position of the State. Taxpayers to whom the impact of the levy may have been passed onto will have since benefited from tax reductions in the last number of Budgets.