Taken from a ‘letter to the editor’ in today’s Sunday Independent on the matter of the recently imposed levy on private pensions.
A few short weeks back he said in the Dail that he was unable to do anything about a very large pension pot awarded to former AIB boss Colm Doherty because of contractual arrangements and pension legislation.
Yet on Tuesday last, as quoted on the Department of Finance website, he appeared to have no difficulty in changing the self-same contractual arrangements and pension legislation to rob the ordinary person. Could you ask Mr Noonan to explain the difference between Colm Doherty and me?
For better or worse the difference is this – the pension levy does not involve a change to any contract. Doherty (one assumes) had a certain level of pension written into his contract of employment. Reducing his pension would go against that contract and I presume he could sue.
In theory at least, the pension levy will not affect the pension a private sector worker is entitled to under their contract of employment. (The problem arises where a company defined benefit scheme might go under due to the levy and have to agree reduced benefits with its members. Defined contract schemes will see a direct cut in fund value and a direct knock-on effect on benefits paid out).
I would imagine Noonan’s only way out would be an additional tax on pensions or a ceiling on tax-free lump sum. That would be difficult (impossible?) to target at one person however.
Thanks for that Cathyby