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ACCORDING to Mr Noonan in the Dáil the other day he stated that it was actually the pension industry who proposed this levy in lieu of a reduction on the interest relief for those on the higher tax rate.
If this is true, they breached their duty of care towards those who are in pension payment or those who have deferred pensions, as they actually volunteered a portion of their fund to a possible future government. These people handed over their money to these people in good faith and understood that the trustees of their fund were there to protect their investments for their retirement. Mr Noonan also knew they had this duty but chose to ignore it and went ahead and did a secret deal with them. This is a case for the ombudsman. Every single pensioner has a right to know which companies collaborated in this deal as they need to establish if the trustees of their fund are in breach of their trust. Mr Noonan has a duty to release any papers or telephone records he has in relation to this deal.
This levy is totally inequitable on several grounds. A person on a private pension of €10,000 gross which would be €9760 after USC which is actually less than a single person would get on the dole, could have a cut of anything between €500 and €900 a year. This cut is 100% to 200% higher than the cut they had in the budget. This is the same government that promised to review USC for people on lower incomes but instead they cut their income by a further 5% to 10%. It is important to realise that the levy is on the fund not on the income. You would need a fund of approx of €150,000 to fund a pension of €10,000 and 0.06% of 150,000 is 900 thus a reduction of €900 on the income.
Many private sector people took early retirement in their 50s as part of restructuring plans so that younger people could keep their jobs and have much reduced pensions as a result and it would be their only source of income. I would challenge any TD or government minister to justify the points I have raised. This levy is morally and socially wrong. It will cost jobs in the pension industry as no right-minded person would now take out a pension and many will drop the pension they already have as they won’t be able to afford the higher contributions and can’t see any reason why they should have one now. It will depress the economy further and will cause a run on the banks as this measure has undermined all our financial institutions. Well done, Fine Gael and Labour.
South Douglas Road
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