Pension Levy Makes No Sense

6 May 2011

The imposition of a levy on private pension funds makes no sense and could cause further problems for already troubled schemes, the Irish Congress of Trade Unions has said. .

Congress has instead proposed that Irish pension funds should be assisted and facilitated to invest their funds in Ireland, as opposed to economies overseas, as this would have a far bigger impact on job creation. Congress has discussed this proposal with the Department of Finance over the last 12 months and the Department has accepted that it has merit.

According to Congress official Fergus Whelan, the imposition of a levy makes no sense "at a time when many funds are in difficulty because their liabilities exceed their assets. More importantly it shows a real lack of imagination as to how these funds can be harnessed to the goal of job creation and growth," Mr Whelan said.

"These pension funds comprise some €72 billion in savings that belong to people working in Ireland. Most of that money is invested abroad, helping to create jobs and wealth in other economies.

"Congress believes that a way should be found to facilitate and enhance investment prospects here at home. The Department of Finance has accepted our proposal has merit.

"It should not be beyond the combined creative genius of the Government, the Association of Pension Funds and the fund trustees to develop investment vehicles that would facilitate funds investing in building or upgrading badly-needed social infrastructure, such as hospitals, schools, and transport," Mr Whelan said.

Mr Whelan said that pursuing the levy option did not represent 'best use' of the funds and served instead to penalise them.