PENSION LEVY QUERY
Q. I am one of the original “victims” of Mr. Noonan’s private pension levy in the 2011 budget. In my particular case, the trustees of my scheme decided that our fund wasn’t strong enough to pay the levy directly. The consequence of this decision was that anyone on pension at that time had to pay it from their monthly payment. In the 2015 /2016 budget last October, Mr. Noonan announced that the levy would cease from January 2016. However, I have received my January 2016 pension, and my pension has not been restored to the full original value. Do you have any idea why this may be the case? Also I heard that our trustees may take the decision not to restore our pensions to the level that they were at before the levy was deducted – because of a shortfall in the pension fund. Have they the right to do this to people already drawing a pension?
A. The Pension Levy was introduced by the Minister of Finance, Michael Noonan in May 2011 as a 0.6% charge on Pension Fund assets held in the state, to fund the Governments Job Initiative. It was intended to apply for a period of 4 years only and so, as anticipated, it was announced in Budget 2016 that from end December 2015 it would be scrapped.
It may be that for administrative reasons the trustees of your pension fund were unable to adjust their systems in time for the January payment and that in the following months an appropriate refund will be made.
Alternatively, if there is a shortfall in the pension fund they may have decided for reasons of prudence to maintain the payments at 2015 levels, regardless of the withdrawal of the levy. The duties of trustees are onerous and they have an obligation to their members to maintain the integrity of the fund and to take whatever steps are necessary to ensure its ongoing solvency.
This is something you should query firstly with the trustees and if you feel aggrieved with their answer you could raise the matter with the Pensions Authority, a statutory body which exercises a regulatory function over private pension schemes.