Pension provision - Inequity takes focus off jobs crisis

DESPERATE times, and these indeed are, require desperate measures. If these measures are not fair then they can add to the sense of desperation that made the unusual measures necessary in the first place.

The levy to be retrospectively imposed on private pensions to fund job creation falls into that category. No one enjoys surrendering hard-earned money to the State but that reluctance is eased by the understanding that the burden is shared more or less equally by all citizens. This levy is not and that simple fact is at the root of a lot of the resentment it has provoked.

It is more than likely that most of those affected would not complain so loudly — or at all — if all pensions, including state pensions, were levied equally.

At least two ministers have had to squirm publicly trying to defend it. Enterprise Minister Richard Bruton, on Tuesday night, when he insisted that the pension levy previously imposed on public sector workers made it impossible to include such pensions in this measure. Of course that’s preposterous. That levy was imposed because the contributions being made bore no relationship to what was eventually paid out.

Yesterday afternoon Joan Burton, Minister for Social Protection, did her bit of shrill squirming when she refused to answer, on three occasions, questions put to her by RTÉ’s Seán O’Rourke, when he asked her how pension funds in huge deficit might pay the levy. This question struck at the core of the inequity of the proposal and deserves an answer — if there is one.

If the decision not to levy everyone equally is a consequence of the Croke Park promise not to cut pay then that agreement is fatally undermined.

However, some good has come of the spat.

Taoiseach Enda Kenny’s Dáil response to Shane Ross suggested an encouraging willingness to grab an almost out of control tiger by the tail. Deputy Ross suggested it was time to investigate the pensions industry and the “goldmine”, “gravy train” and “swamp” of pension fund managers. Pensions, and the related charges, are a quagmire for a lot of people and will become even more so as employers leave workers to make their own arrangements. In light of recent betrayals by the financial sector, this smacks of, once again, throwing the lambs to the wolves.

Mr Kenny’s positive response to Mr Ross’s call for an inquiry into pension charges should be expanded to cover all aspects of what is becoming a cause of concern for a great number of people.

If a pensions commission was established, under the leadership of a full cabinet minister for pensions and with representatives from all sectors of society, then great progress could be made towards establishing equity, transparency, value for money and social cohesion. It might also help create a fund capable of making levies like that imposed this week unnecessary.

Despite the furore and the inequity exposed we should not lose sight of the bigger picture. The levy is being imposed to try to create jobs for some of the 440,000 people out of work in this country. This is a far greater and more pressing problem, so for the time being at least it must be a case of grin and bear it.


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