A new (second) pensions levy on private pension funds (of 0.15%) has been introduced for 2014 and 2015.  This change means that private pension schemes will pay both the previous 0.6% levy and the new 0.15% levy in 2014 (a combined 0.75% levy) and the new 0.15% levy in 2015.  The levy will take an estimated €650m out of pension savings in 2014 and another €135m in 2015.   

The Minister for Finance has said that the new levy of 0.15% is designed to fund a continuing jobs initiative and to make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties.   

Comment

Like the original 0.6% “temporary” pensions levy, the new 0.15% levy will continue to affect all private pension schemes detrimentally at a time when many schemes are underfunded and have agreed cuts to benefits and increases to contributions.  A basic concern is the inequity of the new levy which effectively penalises all defined contribution scheme members in order to fund historic deficits in DB schemes.  Moreover, if the intention behind the new levy is to fund DB scheme deficits of insolvent companies, such as the Waterford Crystal pension scheme, it is difficult to see the levy ceasing in 2015.