The pensions industry and the opposition were among those to criticise the move, which will see the levy rise next year from its current level of 0.6% to 0.75%, before then being cut back to 0.15% in 2015.
Jerry Moriarty, CEO of the Irish Association of Pension Funds, said this flew in the face of a previous government commitment to scrap the levy altogether.
“The minister went out of his way last December to say that the ‘pension levy announced as part of the Jobs Initiative will not be renewed after 2014’, and highlighted the need for certainty in the pensions sector,” he said.
“Ten months later he reverses that commitment, so it’s difficult to believe him now that the 0.15% levy scheduled for 2015 will only be that and will not be increased substantially in next year’s speech. There is no justification for increasing the levy to 0.75% of all assets to €650m next year. This is well in excess of any of the job initiatives this levy was originally intended to fund — and has been for some time.”
He also pointed out that the minister’s own pension benefits are specifically excluded from this tax.
Ciaran Phelan, CEO of the Irish Brokers’ Association, said the minister had reversed the pledge to end “the grossly unjust pension levy”.
“The minister promised to remove this discriminatory levy, that only negatively affects the private sector, but instead we see an increase in 2014 and a continuation although at a reduced rate in 2015,” he said.
Samantha McConnell, chief investment officer, IFG Corporate Pensions, said: “What we got hit with was the levy increasing to 0.75% for 2014 and then instead of abolishing it as promised last year it will continue at 0.15%. DC (Defined Contribution) pensions are paying for DB (Defined Benefit) mistakes again despite promises to the contrary.”
Fianna Fáil TD Dara Calleary said: “While the Government introduced the pension levy to create jobs in the short term it is clear the Government now sees it as a straightforward revenue generator.”
He said the levy seemed to be “a new, permanent stealth tax dressed up as a job initiative”.
Ibec CEO Danny McCoy said the retention of the levy was “a major disappointment”.