Releasing pension funds could ease cost of bailout

WOULDN’T it make sense in these austere times to release some of the €100bn tied up in private sector pensions funds and avoid the high cost of the IMF bailout funds?

For example, taking a private sector pensions contribution holiday for five years would release €50bn-€20bn tax subsidy and €30bn private sector contributions.

The €20bn could be used to reduce our borrowing requirements and the €30bn should stimulate economic activity.

The €4.1bn annual tax subsidy only benefits the pensions industry and possibly the 13% of workers on the top rate of tax.

It is of no benefit to the remaining 87% of workers.

Any benefit likely to accrue to standard rate taxpayers is totally wiped out by the pensions industry’s 25% management fee.

It is now time for our politicians to explain to the electorate why we are borrowing €4.1bn per annum from the IMF to subsidise pension benefits for the wealthiest 13% in our society.

Michael Terry

Dublin 15