Isme to crowdfund €500k for High Court challenge to 'private-public pension discrimination' 

Isme CEO Neil McDonnell said it is seeking to attract a broad coalition for its legal challenge to include 'Paye workers, professional groups, trade associations, trade unions, and SME owners across Ireland'. File picture: Gerard O’Loughlin

Business group Isme is turning to Gofundme as it seeks to crowdfund €500,000 for a High Court challenge to what it sees as a huge unfairness between private and public pensions, the Irish Examiner has learned.

The SME association said it hopes the case will challenge the existing pensions regime on the basis of the disparity and "tax discrimination" facing private pensions. Its chief executive Neil McDonnell said it is seeking to attract a broad coalition for its legal challenge to include "Paye workers, professional groups, trade associations, trade unions, and SME owners across Ireland". 

Private sector workers have little hope in building up the €2m pension pot that is enjoyed by higher-paid public sector pensioners, he said. "Yet higher-earning private-sector workers are financially penalised if they save more than €2m of their own money for their pension," the business group said. 

Citing the Public Service Pay Commission report, Isme said almost all public sector workers have a pension, but the coverage in the private sector is only 40%. 

"Workers in the private sector who aspire to a pension even close to that enjoyed by a public sector worker earning the same salary would have to surrender more than a third of their salary," Isme said on its Gofundme page.     

"Even if they could afford it, our taxation rules constrain them from doing so. Our taxation system permits only third division pensions for the private sector, meaning most Paye workers will have only the contributory old-age pension of €248 per week to live on in retirement," Isme said.

"The funds raised will support the formation of a technical team giving tax guidance, pensions expertise, actuarial assistance together with tax and constitutional law advice for the pension’s equity challenge. We intend to initiate proceedings in the High Court this year," it said.