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Jobs Budget

Government may levy private pensions to pay for jobs budget

The Irish Association of Pension Funds says a new levy on private pensions would be tantamount to a ‘stealth tax’.

A LOBBY GROUP representing Irish pension funds has said it believes the government’s ‘jobs budget’ being announced next Tuesday will impose a ‘stealth tax’ on private sector pensions in a bid to fund its initiatives.

The Irish Association of Pension Funds said the jobs initiative – set to be unveiled in the Dáil in four days’ time – will include legislation allowing the pensions of 65,000 retired people to be cut.

When the current cabinet had “insulated themselves from this new stealth tax, over 750,000 private sector workers are also expected to pay this money out of their pension savings,” the IAPF said in a statement.

That move, which the IAPF opposed, was denounced as “an attack on the savings of ordinary pensioners and workers while protecting politicians and public sector workers who already have the best pension benefits”.

IAPF policy director Jerry Moriarty said the levy would take almost €2bn out of private pension savings in the next four years – a move which would almost certainly mean the end of some pension schemes.

IAPF said the scheme would see an annual levy of between 0.5 and 0.6 per cent of the pension scheme assets of all pension savers.

“The intention that this levy might be imposed only on private pension schemes pensioners and members is blatantly discriminatory,” Moriarty said, “and further compounds the unfavourable treatment of one sector of society already struggling to make provisions for their retirement.”

Moriarty also criticised Fine Gael for claiming that a levy on private pensions had the support of the industry.

The Department of Finance declined to confirm whether the levy would feature in its plans when contacted this afternoon.

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