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
sector workers.

“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.