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More than €2bn taken from pockets of pension holders

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Finance Minister Michael Noonan

Finance Minister Michael Noonan

Finance Minister Michael Noonan

The Government has taken more than €2bn from the pockets of those paying into private pensions over the last four years, according to a pensions lobby group.

This €2bn was taken through the private pension levy - which was introduced by the Government in early 2011. The levy was initially set at 0.6pc of the market value of private pension funds but in 2014, Finance Minister Michael Noonan increased it to 0.75pc.

"This levy is now more than the management fees paid by the majority of pension schemes we represent," said the Irish Association of Pension Funds (IAPF) in its latest pre-budget submission.

The recent hike in the levy "will bring the total payment from the levy for the four years of its existence to well over €2bn," said the IAPF. "This is a significant contribution from retirement savings, at a time when those savings are not enough to provide most people with an adequate income in retirement."

The IAPF has called on Mr Noonan to honour a previous promise he made to scrap the levy.

When the Government increased the levy, it said it was doing so to cover the cost of a potential hit to the Exchequer arising from pension fund difficulties. "No details have been provided as to what these liabilities might be, or whether the funds collected will be specifically earmarked for such liabilities," said the IAPF.

"In any case, it is completely inequitable to ask those with defined-contribution retirement savings to make a contribution to state liabilities in defined-benefit schemes."

Sunday Indo Business