Irish Life and Zurich Life, two of the biggest pension providers in the country, have asked the Government to impose a €200m levy on retirement funds in the upcoming Budget rather than cut tax relief on contributions, The Sunday Times reports.
“A levy can’t be a long-term solution but it could be justified because people benefited from good tax relief on their pension contributions. A levy would just claw some of that back for the government,” said Brendan Johnston, the pensions director at Zurich.
Johnston estimates Irish pension funds are worth €86 billion, meaning a 0.25% levy would bring in €215m a year.
Zurich is also proposing that savers should be allowed access to some of their pension funds before retirement, netting a potential €100m for the exchequer from tax on withdrawals. The insurer says individuals in economic difficulties should be able to take out up to 10% of their pension savings over four years.
The Labour Party, meanwhile, is proposing to raise €500m from two pension measures: a levy on private-sector pensions and a cap on public-sector one.
“We’re looking at whether it’s possible to get back some of the money that has been put into pensions in the last few years by people taking advantage of huge tax reliefs,” said Róisín Shortall, the party’s spokeswoman on social protection. “For example, Michael Fingleton with his €27m pension. We think it is not unreasonable to put a levy on the pensions of people like that.”