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Nov, 2011

Two-fifths of people would reduce their pension contributions if tax reliefs are reduced, according to a survey carried out on behalf of pensions company Invesco.

The Sunday Business Post says the survey notes any reduction would also affect public sector workers’ take-home pay, as tax reliefs were provided on the 2009 public sector pension levy.

The survey found 52% of those with pensions were unaware the government had introduced a pension levy to fund a jobs initiative, despite the fact it will reduce the value of an individual’s pension by 0.6% for each of the next four years.

“The research shows that any reductions in tax relief on contributions would be a disincentive to savings,” said Invesco managing director Des McGarry.

Elsewhere, the newspaper calculates public servants can expect to receive pensions of around €32,000 a year assuming full pensionable service and a tax-free lump sum of €100,000 on retirement.

That is, of course, an average. The Sunday Times reports on the government’s ongoing fight to impose a €60,000 limit on higher public servant pensions. The initiative is meeting fierce resistance from the upper echelons of the service.

“Senior civil servants are putting pressure on ministers to withdraw the cap, proposed in the Programme for Government, which is designed to deliver some of the €940m annual savings from abolishing pensions tax breaks, demanded under the troika bailout plan,” the newspaper says.

“The government is under pressure to curb the massive retirement packages of top civil servants. It emerged last week that Brigid McManus, the secretary-general of the Department of Education, will receive €114,839 a year when she retires shortly aged 53.”

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