Private pension levy fuels 'them and us' rift
Published 20/05/2011 | 05:00
The private sector pension levy is dangerously divisive and is fuelling a growing rift between the public and private sectors. I have heard no good reason why it cannot be applied to both sectors in a fair manner.
There are major differences that have to be considered. Private sector pensions are paid from funds that have an actual value and contain real assets, while public sector pensions are paid from taxes. However, a notional value can be attributed to public sector funds. This was done recently to check if they exceed the new €2.3m limit introduced in this year's Finance Act.
Of course, public servants could not be expected to actually pay the levy amount, but the Exchequer could still receive equivalent value by reducing the notional value of its future public sector pension liability.