Wednesday 28 September 2016

Noonan should abandon his €140m plunder of the prudent

Published 28/06/2015 | 02:30

The savage eye of Michael Noonan
The savage eye of Michael Noonan

The numbers are staggering. By the end of this month the pension funds of private sector workers will be raided, and raided big-time.

  • Go To

The gang behind the heist is no less than our Government.

The raid is set to extract around €140m from the retirement funds of workers - money they can ill afford to lose.

The €140m is set to be the final instalment in the levy imposed over a four-year period on the pensions of ordinary people.

These are the people who had the foresight (and the luck to have a decent enough employer) to have a pension. In most cases, the funds are small and will provide for a modest retirement income.

With the financial crash, many of the people affected by this pernicious levy have been contributing less to their pension funds.

This comes as the performance of pension funds over the last few years has not been sufficient to match longer life expectancy.

Last year the levy took in €68m more than expected. In four years it has brought in €2.224bn for the State.

It is the most extreme example of the State punishing the prudent. These are people trying to provide for themselves, and find that they have been hit hard financially.

It is worth noting that public servants are having the impact of the separate pensions levy imposed on them eased.

Under the proposals to be voted on, all public service staff will receive a €1,000 flat-rate boost to earnings next year to be achieved by raising the exemption thresholds for the public service pension levy.

Public servants have one of the best pension schemes in the country.

That is something that is not even realised by most of those in the service of the State.

With private schemes there is a fund, and when that fund is raided the money is gone forever.

This means the impact of the levy on private sector pensions will be permanent.

Fianna Fail's Michael McGrath has suggested that the Government scraps the final instalment of the pension levy due to be deducted from pension funds by next Tuesday.

Jerry Moriarty of the Irish Association of Pension Funds supports the scrapping of the levy for this year which would be a small gesture considering the €2.2bn that has been collected to date.

The public finances generally have improved - €734m more than expected was taken in tax in the first five months of this year. So we can afford to stop punishing the prudent.

Finance Minister Michael Noonan would be doing the decent thing if he scrapped the levy payment due next week.

Sunday Indo Business

Read More

Promoted articles

Don't Miss

Editor's Choice