Fianna Fáil Spokesperson on Public Expenditure and Financial Sector Reform Michael McGrath TD has said the any effort by the government to introduce a stealth tax on private sector pension funds will unfairly penalise pensioners and savers and damage the economy.
Deputy McGrath was responding to speculation that the government plans to fund next Tuesday’s jobs initiative by introducing a levy on pension funds. According to the Irish Association of Pension Funds (IAPF), the government is planning to raise €450 million per year for at least four years by raiding the private pension savings of three quarters of a million private
“Thousands of private sector workers have already seen the value of their pension funds hammered during the economic crisis. Many defined benefit pension schemes are in the red. According to the pensions firm Mercer, pension plan deficits for quoted Irish companies alone stood at €4.5 billion at the end of 2010. Where is the sense in the Government applying a levy to pension funds already in the red?
“For many years, the State has encouraged people to invest in their own pension funds. For a government to raid those funds at a time when fund values have already collapsed defies logic. Let there be no mistake about it, this measure would hit people in the pocket and hit them hard.
“We have asking the government for weeks how they intend to fund the jobs initiative but no answers have been provided. We know that the VAT and Employer PRSI reductions will alone cost about €1.3 billion to the end of 2013. It now appears that the government intends to fund this by raiding the pockets of anyone with a private pension fund, no matter how small it
is and no matter how difficult their own financial situation is.
“The IAPF estimates that the levy will cost 750,000 workers an average of over €500 per year. When promising a jobs budget during the election, Fine Gael and Labour chose to hide the fact they would be asking pensioners and anyone contributing to a private pension scheme to pay for it,” stated Deputy McGrath.