Business Irish

Thursday 30 March 2017

BoI denies hurting the taxpayer with pension-fund levy scheme

banks

Charlie Weston, Personal Finance Editor

BANK of Ireland has denied taxpayers were losing out after it emerged that the bailed-out bank was offering to pay the pensions levy on behalf of customers that take out a private pension with it.

The bank's life division, New Ireland, will pay the 0.6pc pension-fund levy for those who take out a personal or an executive pension.

An initial lump sum of at least €10,000 must be put into the pensions and a minimum of €500 a month.

"New Ireland will pay the 0.6pc pension-fund levy over the next three years (to 2014) subject to regular premiums continuing for five years from the policy start date," a New Ireland brochure said.

Brokers said this meant taxpayers were being forced to pay on the double to save the bank as they had bailed it out and were now subsidising the paying of the pension levy on behalf of New Ireland customers.

Guarantee

The bank is covered by the state guarantee and has had €3.6bn pumped into it by the Exchequer.

But a spokeswoman for the bank denied taxpayers were being hit twice.

"The two issues are completely unrelated. New Ireland is running a targeted marketing promotion, funded within the fee structure, which is common practice in the very competitive life assurance industry."

And the bank denied competition concerns were raised by a bailed-out bank paying an Exchequer levy.

"This type of special offer is common practice in the industry and is funded from within the life assurance company.

"New Ireland has enjoyed market share growth in 2010 and in the first half of 2011 pre-dating the introduction of this offer, reflecting the very strong product range and investment fund offering of New Ireland," it said.

The State has a 15pc stake in Bank of Ireland. Fees to the State of around €700m had been paid since March 2009, the spokeswoman stressed.

Irish Independent

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