Irish Pensions Magazine Autumn 2013
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W
elcome to the Autumn Edition of IAPF online magazine. The last
number of weeks has continued the trend of being particularly busy
for the Association with the changes announced for the Standard Fund
Threshold (SFT) and the Pensions Levy. It appears that the challenges
facing pension provision and the difficulties facing our members grow by
the year. It is extremely regretful that the Minister of Finance has reneged
not only on his commitment to terminate the Pensions levy at the end of
2014, announced an increase in the levy for 2014, but has announced and
a continuation of it into 2015. It now appears as if the levy is becoming a
more permanent feature of State funding.
This is effectively a raid on people’s retirement savings. The reasoning for the continuation
for the levy is also questionable and the Department of Finance appears to be issuing mixed
messages. Is it to fund the lower than expected tax take from their revised method of calculating
the SFT? Or is it to fund for possible Defined Benefit liabilities arising from the Hogan case? If
it is the latter there is no reasonable justification for imposing this levy on DC members and no
reason why the funds cannot be ring fenced for such liabilities.
It is also extremely disappointing that Minister Joan Burton has failed to follow through on
her promise to revise the Priority Order. The number of DB schemes winding up continues
to accelerate as was evident in recent figures from the Pensions Board. The IAPF will shortly
publish statistics on the level of coverage for active and deferred members in these schemes.
This will reinforce the need to have a fairer distribution of assets amongst pension scheme
members.
Over the autumn period, the Association has also been focusing on how we can best serve
you. We have being reviewing our “raison d’etre” so we are clear as to our vision of the future
pensions landscape in Ireland, the needs of our members and measuring how successful we
are in delivering to your needs. It is essential that we continue to be relevant and heard on your
behalf. As a result of our work, we have agreed that the mandate as an Association is clear. We
must ensure that we influence the development of Secure, Fair and Simple pension provision
in Ireland.
Both the levy and the lack of action on the priority order will certainly challenge two of our three
core principles – Security and Fairness. Schemes will no longer be in a position to absorb
the levy and Security of Benefits will be jeopardised and pensioner benefits will be cut. The
continual raid on people’s savings will challenge pension adequacy. Then there is the question
of Fairness. Is it Fair that Defined Contribution members will have to fund potential Defined
Benefit risks? Is it fair that some people will be able to accrue pension incomes in excess of
€60,000 per annum? There certainly is nothing Simple about these developments and we will
strive to continue to represent your views during these challenging times.
Review
Chairperson’s Message
Rachael Ingle
Chairperson
