Irish Pensions Magazine Spring 2014
4
Chairperson’s Message
A
lthough I have only been in this role for 8 months, the amount of activity over that
time has been astounding. The funding standard has been turned back on, the
pension priority order has changed, we have had a very interesting outcome from the
Element 6 case, the State pension now starts at age 66, the Standard Fund Threshold has
come down and the OECD report was published.
During that time also, much has been made by the Minister for Finance around the
pensions levy on private sector pension savings - its increase this year and its continuation
until next year. To be honest, when the increase to 75bps for 2014 was announced in
October last year, this was the time when I felt the most deflated over that 8 months -
as it just brought home to me again the short sighted nature of politics. What was as
disappointing was the attempt to abdicate responsibility for decisions and lay blame for
the continuation of the levy directly elsewhere and particularly at those of us who work in the pensions sector.
Remember, over €2.2bn will have been collected by the end of this year.
It was in good faith that the IAPF participated in a taxation policy group to try and come up with ways of helping
the Government achieve the financial targets it set itself as part of the Troika agreement and to achieve the policy
set out in the Programme for Government. We invested a lot of time, effort and expense in pulling data together
and costing options. The fact is that this groups’ work and recommendations were ignored by Government -
leaving a gap to be filled. This, as we all know, will now be filled by a further tax on pension savings for this year
and next.
It seem wholly contradictory that the Government is considering implementing a universal approach to pension
savings with the specific goal of persuading all to join, and yet at the same time is perfectly content to dip its hand
into the accounts of pension saver’s hard earned and hard saved money.
In order to improve the situation of pensioners in this country we have to deal with what we have and know now,
and make any changes based on the facts before us. We need to do this in a coordinated way in an effort to shape
Secure
Fair and
Simple
pension provision in Ireland.
We need 21st century solutions to 21st century problems, where advances in medical research mean that people
are living longer - which should be welcomed and the world of investments is considerably more volatile.
Pensioners are going to get more frustrated at their pensions being reduced and young people will get more
frustrated as they don’t know if they will have any chance of receiving a reasonable or any income when they reach
retirement.
So what can we do?
• Firstly - We need to simplify the current regime and make decisions based on the average individual and
balance future proofing with short term needs.
• Secondly - We must earn back the trust of the ordinary Irish citizen who now thinks that the pension savings
they make are not secure, being at the whim of the finances of the State. Saving for retirement is a good thing
and we must reinforce that message.
