New Pension Levy!!

allycavs

After attempts to encourage young people to start a private pension as the Government wont be able to afford to pay a good pension when we retire they have since hit pensions with the universal social charge. And now Fine Gael (the guys that promised cuts as opposed to extra taxation are now putting a further 0.5/0.6% tax on pensions)

This isn't even a levy on the the growth in your pension. So if your pension is declining you will be hit with a further decline thanks to this new levy. This is disgraceful. What happened to reforming HSE, government cuts, and stabilising payments. Look at what the top brass in the ESB, Bord Coillte and so on earn. Why not hit the public service with the same levy!! Their pensions at retirement time are guaranteed to be a 66% percentage of the salary they retire on. Us in the private sector have no guarantee so what ever.


Why do we just take this painful medicine with out ever showing our frustration. We should be marching on the streets!!

Box09

You are spot on. This is the first major error by Fine Gael and they obviously didn't learn from Fianna Fails run in with the grey vote on the medical card issue.

This will mean that people who are unemployed with deferred private pensions or paid up PRSA's will have their funds taxed to fund a jobs initiative that may be unsuccessful. It also means existing pensioners may (depending on the financial position of their employer/scheme) will have their pensions cut.

This is a disgrace and public sector gold plated pensions will not be touched.

laughter189

I thought that the public service already pay a pension levy.

This taxation by stealth has to stop .

---

The only benefit of this tax , is that many will now reduce their pensions contribution , and therefore have more take-home pay .

Which will of course mean more money into our failed economy .

Box09

The public sector pays a levy that only partly goes to funding the true cost of their generous pensions. By way of paying a levy their benefits will not be cut unlike private sector workers who face cuts in their pension income.

Some members will not have the option to reduce their contribution levels.

ssbob

What I see as happening here is people will stop paying into pensions as a lot of them have been decimated here, for what its worth I think that is what the Fine Gael may be trying to do, they want to encourage money into the economy!!!

talla10

allycavs wrote: »

Why not hit the public service with the same levy!! QUOTE]

Eh the Public Service were hit with a 7.5% pension levy and i think thats more than enough considering the private sector are getting a 0.5% levy. Also the pension levy for the public sector includes all overtime worked even though overtime isnt pensionable.

I really dont want another private/public debate but those are the facts. Are either levys fair? Not in the slightest, neither public/private sectors caused this mess and the other day a friend of mine of works in Anglo Irish Bank got a raise from 33k a year to 45k a year. :mad:

ssbob

talla10 wrote: »

allycavs wrote: »

Why not hit the public service with the same levy!! QUOTE]

Eh the Public Service were hit with a 7.5% pension levy and i think thats more than enough considering the private sector are getting a 0.5% levy. Also the pension levy for the public sector includes all overtime worked even though overtime isnt pensionable.

I really dont want another private/public debate but those are the facts. Are either levys fair? Not in the slightest, neither public/private sectors caused this mess and the other day a friend of mine of works in Anglo Irish Bank got a raise from 33k a year to 45k a year. :mad:

That is crazy...................you should send that info to Joe Duffy, George Hook, Matt Cooper etc...................

I think the public Service Pension Levy was a pay cut and not a levy really, I even remember the sneering Willie O Dea announcing it............................

There is a good thread after starting here for ideas to help entrepreneurs restore our country, take a look:

http://www.boards.ie/vbulletin/showthread.php?t=2056259989

Box09

You don't really understand the issue. Yes you did get a levy on your earnings (which receives tax relief) to fund a very generous pension. The private levy is on the value of the fund so effectively this is entirely different to the public sector levy. A private pension is not guaranteed whereas a public sector is (well assuming national solvency!).

The levy will result in reduced private pensions. So your facts are wrong talla10.

talla10 wrote: »

allycavs wrote: »

Why not hit the public service with the same levy!! QUOTE]

Eh the Public Service were hit with a 7.5% pension levy and i think thats more than enough considering the private sector are getting a 0.5% levy. Also the pension levy for the public sector includes all overtime worked even though overtime isnt pensionable.

I really dont want another private/public debate but those are the facts. Are either levys fair? Not in the slightest, neither public/private sectors caused this mess and the other day a friend of mine of works in Anglo Irish Bank got a raise from 33k a year to 45k a year. :mad:

cianeill

people should go back and have a look on the RTE website from Feb/2009 when Eamon Gilmore lost the plot in the Dail over the introduction of the public sector pension and how wrong it was to hit the workers with a further tax.
I am just wondering will he stand up in the Dail next week and voice his disgust at the introduction of this levy for the private workers.
I doubt so very much. I have been trying since Thursday the 5/may to contact sombody in the Labour parlimentary party for an explanation and I have had no response from anyone yet.
Sean Sherlock has a mobile no on his website and he will tell you on the answer machine when you ring that your call is very important to him and he will contact you as soon as possible.
The only problem was when I got no reply I rang again the folowing day and his secetary answered it.
Now that to me seems laughable and if I have a mobile no I dont expect sombody else to answer unless I was in the toilet.
I have contacted 17 members of the labour partys T.Ds and hopefully before I go to my grave I might get a response

allthedoyles

There is no point in believing that the politicians mentioned above are any different to the politicians that we just threw out of office .

They are all the same , , -its just that the places have been reversed .

They will stand up in the Dail , and voice there opinion on how the levy is justified .

They will talk about the three most important challenges ahead which are :

1. Jobs
2. Jobs
3. Jobs

But you know , and I know that it will only be the same old rhetoric .

cianeill

you are right about them been all the same but where is the sense in punishing sombody who is saving for their future.
A pension is a saving and it seems to me that they will now go after peoples savings with the same type of levy and if that happens it is time to throw the towel in.

alex73

Shock horror.... When I returned to Ireland in the boom I was told I was crazy not to buy a house, that it was a sure investment and prices were going up 12% a year. People were taking our 40K to buy new cars and off on 2 holidays a year. I hear people complaining they don't want a nanny state,,, but then they complain the state is not regulating. We borrowed ourselves into a hole, now we need to pay it back. I honestly can see why people are surprised the government is putting levies on us. What do you expect? Pensions or wages, VAT, Cuts to Social welfare, at the end of the day we don't call the shots on our spending anymore and its the EU/IMF that have imposed the levy.

Anyway us Irish are pack of Lambs... we just take it all in silence.

alex73

Actually its not such a bad Idea, If you have a pension pot of a million you pay 24K over the next 4 years. Or 2400 euros on every 100K.

Lets face it, its to create jobs for People who have no work (and probably no pension)

In the grand sheme of things its not a bad idea.

Slasher

talla10 wrote: »

the Public Service were hit with a 7.5% pension levy

That levy is tax deductible, so the net effect is much less than 7.5%. The 0.5% levy will not be tax deductible as it will be a tax on accumulated pension schemes.

There are a number of unanswered questions about the levy. Supposing I am in a DB scheme (I wish!), and the Scheme pays over the levy to Revenue, that will cause a (further) deficit in the Fund. Who will pay the deficit? The employer? I think not. The members? Probably.

Box09

So if you had 100K in savings would you like to have to give over 10K of that over the next 4 years. I think not.

Lets not forget that more top end jobs will be lost in the financial services industry that will be created by any such levy.

In the grand scheme of things it shows a pure lack of imagination regarding how to create jobs.

alex73 wrote: »

Actually its not such a bad Idea, If you have a pension pot of a million you pay 24K over the next 4 years. Or 2400 euros on every 100K.

Lets face it, its to create jobs for People who have no work (and probably no pension)

In the grand sheme of things its not a bad idea.

wayneywuff

This private pension levy proposal is flawed as outlined above. All you can do at this point is voice your opposition to your local TDs which I have done, but I don't expect much of a response to be honest. As private sector workers we are an easy target.

Firedance

so how exactly will this affect us? for e.g. I have a PRSA that I contribute to monthly as does my employer, the value of the fund is less than the total monies contributed to date(!). I think the 0.5% is on the total value of the fund? so when & how do I pay this? is it in x number of years when I collect my pension or do we get a bill from revenue every year for the next four years? . If I stop my contributions today will that help reduce the % paid to the government? Thanks!

IrishQFA

Firedance wrote: »

so how exactly will this affect us? for e.g. I have a PRSA that I contribute to monthly as does my employer, the value of the fund is less than the total monies contributed to date(!). I think the 0.5% is on the total value of the fund? so when & how do I pay this? is it in x number of years when I collect my pension or do we get a bill from revenue every year for the next four years? . If I stop my contributions today will that help reduce the % paid to the government? Thanks!

This levey should be looked upon in a similar way as the management charge which applies to your PRSA - probably 1% per annum. This is normally deducted on a monthly basis from the value of your fund, i.e. one 12th of 1% each month. Therefore it will now effectively be 1.6% per annum(or one 12th of 1.6% per month to be more precise. So, if your fund returns, say 7.6% in a year you will see a "net" growth of 6%.
What I am not sure of is will they be able to apply this levy to standard PRSA's at all as the fund based charge is limited to a max of 1% per annum - will they need to change the Pensions Act - yet again!! When I get an answer I will post it here and on twitter under the same username.

ssbob

IrishQFA wrote: »

This levey should be looked upon in a similar way as the management charge which applies to your PRSA - probably 1% per annum. This is normally deducted on a monthly basis from the value of your fund, i.e. one 12th of 1% each month. Therefore it will now effectively be 1.6% per annum(or one 12th of 1.6% per month to be more precise. So, if your fund returns, say 7.6% in a year you will see a "net" growth of 6%.
What I am not sure of is will they be able to apply this levy to standard PRSA's at all as the fund based charge is limited to a max of 1% per annum - will they need to change the Pensions Act - yet again!! When I get an answer I will post it here and on twitter under the same username.

What will happen now is that large multinational corporations are just going to base their pension funds overseas!!

As for stopping contributions Firedance, this is a levy on the fund and not on your payments so stopping the payments will have no material effect. It will mean however in most cases that the amount of benefit you receive in retirement will be reduced dramatically.

Again in my opinon this is just kicking the problem down the road, Michael Somers did a great job to build up the NPRF for the pensions timebomb but between everything now I can see a massive problem in 15/20 years time.

martinn123

ssbob wrote: »

What will happen now is that large multinational corporations are just going to base their pension funds overseas!!

They already do that, and when they invest they are called Bondholders, the one's someone wants to burn

As for stopping contributions Firedance, this is a levy on the fund and not on your payments so stopping the payments will have no material effect. It will mean however in most cases that the amount of benefit you receive in retirement will be reduced dramatically.

''Dramatically'' bit over the top. its a 0.6% levy over 4 yrs. Most PRSA managment charges are 1%, and Pension Fund managers charge up to 5% annually to manage, whether they make a profit/loss.Noonan states if the Fund Managers think its OK to take fees of 5% let them absorbe this Levy..........any takers/ fund managers out there.

ssbob

martinn123 wrote: »

''Dramatically'' bit over the top. its a 0.6% levy over 4 yrs. Most PRSA managment charges are 1%, and Pension Fund managers charge up to 5% annually to manage, whether they make a profit/loss.Noonan states if the Fund Managers think its OK to take fees of 5% let them absorbe this Levy..........any takers/ fund managers out there.

According to Rachel Ingel(spelling??) on the Right Hook on Newstalk yesterday, this .6% each year equates to roughly a €900 reduction on a €10,000 pension or a 9% reduction in benefit for each year it is applied if the .6% is passed on to the consumer. And seeing that a lot of funds are already in trouble then they will have no alternative but to pass this on.

wayneywuff

The levy will be based on the value of the fund on January 1st last “or on the last date of the accounting period ending in the 12 months preceding that date”. It will be paid in two tranches each year by fund trustees or managers.

martinn123

ssbob wrote: »

According to Rachel Ingel(spelling??) on the Right Hook on Newstalk yesterday, this .6% each year equates to roughly a €900 reduction on a €10,000 pension or a 9% reduction in benefit for each year it is applied if the .6% is passed on to the consumer. And seeing that a lot of funds are already in trouble then they will have no alternative but to pass this on.

Did not hear Hookey yesterday, however those figures do not compute.

I am open to correction but,a 2.5% once off levy, results in a reduction in your fund of 2.5%

At retirement the amount of your pension is dependant on the size of your fund, so your pension will be reduced by........2.5%.

Any Actuaries agree/dissagree.

Firedance

ssbob wrote: »

What will happen now is that large multinational corporations are just going to base their pension funds overseas!!

As for stopping contributions Firedance, this is a levy on the fund and not on your payments so stopping the payments will have no material effect. It will mean however in most cases that the amount of benefit you receive in retirement will be reduced dramatically.

Again in my opinon this is just kicking the problem down the road, Michael Somers did a great job to build up the NPRF for the pensions timebomb but between everything now I can see a massive problem in 15/20 years time.

many thanks for clarifying that

ssbob

martinn123 wrote: »

Did not hear Hookey yesterday, however those figures do not compute.

I am open to correction but,a 2.5% once off levy, results in a reduction in your fund of 2.5%

At retirement the amount of your pension is dependant on the size of your fund, so your pension will be reduced by........2.5%.

Any Actuaries agree/dissagree.

I do not know the exact workings of it but that is what they said anyway.

donalg1

allycavs wrote: »

Why not hit the public service with the same levy!! Their pensions at retirement time are guaranteed to be a 66% percentage of the salary they retire on. Us in the private sector have no guarantee so what ever.


!!

The public service workers already pay a pension levy, plus they pay a pension also, from day one working in the public sector a pension is deducted at source from their wages. So whatever pension they receive when they retire they will have contributed over 80% to. I assume you work in the private sector as i do, so tell me how much is taken from your wages each week under the heading pension. I know the answer is nothing, so maybe you should take a chunk of your weekly wage and put it somewhere safe for the rest of your life and then you might have a pension equivalent to someone who has spent their whole 40 year career paying for theirs.

Facts right before you post please!!!

IrishQFA

martinn123 wrote: »

They already do that, and when they invest they are called Bondholders, the one's someone wants to burn''Dramatically'' bit over the top. its a 0.6% levy over 4 yrs. Most PRSA managment charges are 1%, and Pension Fund managers charge up to 5% annually to manage, whether they make a profit/loss.Noonan states if the Fund Managers think its OK to take fees of 5% let them absorbe this Levy..........any takers/ fund managers out there.

Hi Martin123

The 5% you quote is against the contribution and NOT the fund. This means it is much less than 0.6%. Let me explain. If you pay say, €200 per month into your pension then 5% or inthis case €10 per month is taken, or €120 per year. If however your fund has grown to say €100k then the 0.6% equates to €600 per year and this grows each year as your fund grows. If your contribution remains at €200 per month then the 5% that is also charged remains at €120 per year. The management charge goes to the pension provider (Life Company) for managing your money. The 5% goes to the broker who looks after your pension each year.

Multi-National companies, if they have a pension scheme in Ireland for Irish Workers, will have to pay this levy regardless of where the money is invested in the world. (Most managed funds are made up of assets from all over the world.)

The bond-holders that everyone wants to burn own corporate bonds in Irish Banks and not overseas companies.

The question in my mind is whether the Government have copped that the legislation governing PRSA - The Pensions Act - sets the maximum "fund-based charge" at 1% per annum and this will need to be changed to allow for the extra .6%. I cannot see the Pension industry absorbing this charge.

IrishQFA

donalg1 wrote: »

The public service workers already pay a pension levy, plus they pay a pension also, from day one working in the public sector a pension is deducted at source from their wages. So whatever pension they receive when they retire they will have contributed over 80% to. I assume you work in the private sector as i do, so tell me how much is taken from your wages each week under the heading pension. I know the answer is nothing, so maybe you should take a chunk of your weekly wage and put it somewhere safe for the rest of your life and then you might have a pension equivalent to someone who has spent their whole 40 year career paying for theirs.

Facts right before you post please!!!

Apologies for shattering your illusions but the public sector pay nothing like 80% towards the true cost of their pensions. It would be more like 10% - a small contribution towards the actual cost. Until very recently most public sector workers paid nothing towards their pensions. The levy they now pay would get them a tiny pension if they had to rely on it as their only source of contribution I'm afraid. If you like, post the actual % that your wife pays into her pension and I will show you actual figures based on a growth rate of say 6% p.a.

IrishQFA

ssbob wrote: »

I do not know the exact workings of it but that is what they said anyway.

Hi

I am not an actuary but I can do the figures on this. A once off 2.5% will not reduce your pension by 2.5% unless it is taken on your entire fund - i.e. if you were retiring the day it was taken or if you did not pay any more into your pension once the charge was taken. Basically what I am trying to say is, yes on the money you have in your fund when the charge is taken, you will receive a pension of 2.5% less. However, on the monies paid in after the levy, clearly it will have no effect. In short, the further you are from retirement when it is taken the better it will be for you. Eg, if you have 5 out of 40 years paid then it will mean that 35 of those years will be unaffected. If you have 35 years paid in then it has a far greater effect. I hope this clarifies things for you.

IrishQFA

Hi

I am not an actuary but I can do the figures on this. A once off 2.5% will not reduce your pension by 2.5% unless it is taken on your entire fund - i.e. if you were retiring the day it was taken or if you did not pay any more into your pension once the charge was taken. Basically what I am trying to say is, yes on the money you have in your fund when the charge is taken, you will receive a pension of 2.5% less. However, on the monies paid in after the levy, clearly it will have no effect. In short, the further you are from retirement when it is taken the better it will be for you. Eg, if you have 5 out of 40 years paid then it will mean that 35 of those years will be unaffected. If you have 35 years paid in then it has a far greater effect. I hope this clarifies things for you.

namenotavailablE

Until very recently most public sector workers paid nothing towards their pensions.

This is definitely not correct according to my information, unless 'very recently' refers to multiple decades ago- ALL public servants employed since April 1995 paid contributions towards their pension fund (integrated pension is the term, I think) under PRSI class A1 (for the majority). Public servants employed prior to that date also paid contributions using a different formula (non-integrated) using different PRSI classes.
I'm unsure but there may have been some civil servants (a minority) who didn't pay towards their fund (although I don't think this to be the case)- if this can be clarified it would be helpful.

ssbob

Just to clarify here, in a former life I was employed by the HSE in the capacity of a wages and salaries manager. Basically all of the staff were paying contributions towards their pensions somewhere in the region of 6% of their salary per annum. They have a rosy deal as their pensions are guaranteed but lets not get caught up in saying they pay nothing. They are also paying the pension levy now which is not tax deductible as far as I am aware.

One situation for you though which I find is grossly unfair:

Mother in law works for the IBTS, has an entitlement to defined benfit scheme under the terms of her pension, got a letter last year to say their pension was under funded by 50% and that the govt were not going to guarantee their pensions as they are seen as a semi-state body. They however were required to pay the pension levy which goes into the govt coffers and now their pension fund is being hit with this new pension levy.

Somehow I see this as unequitable.....surely should be one levy or the other?

donalg1

IrishQFA wrote: »

Apologies for shattering your illusions but the public sector pay nothing like 80% towards the true cost of their pensions. It would be more like 10% - a small contribution towards the actual cost. Until very recently most public sector workers paid nothing towards their pensions. The levy they now pay would get them a tiny pension if they had to rely on it as their only source of contribution I'm afraid. If you like, post the actual % that your wife pays into her pension and I will show you actual figures based on a growth rate of say 6% p.a.

The levy they pay might get them a tiny pension but what would the pension they pay get them? or have you forgotten about that??????????

IrishQFA

No, it was their existing contribution that I was talking about. If you let me know what % of salary the public servant is paying towards their pension (or even their salary figure)- and I'm not talking about their PRSI here - then I will tell calculate what level of pension that would give them at retirement if they were in a private sector pension.

My understanding is that the public service pension levy is approx 7.5% on average but there are variances here too as there is a smaller % paid up to a certain level and then another level with anything over 20k being hit with 10% as a max. If we use an average of 7.5% over 40 years as a private sector pension (assuming the fund grows by 6% p.a. and salary increases by 3% p.a.) you would expect to receive a pension of 17.37% of salary at retirement without lump sum or, more realistically, 11.68% of salary if they took a lump sum of 1.5 x salary. I should also point out that this is not in any way guaranteed and the above figures assume that a kindly broker did not charge any commission. Now, I think you might agree that it is indeed "tiny" in comparison? By the way I am not party to any Private Sector V Public Sector battle - I am merely pointing out the true facts. (My better half is a Nurse)
Hope this is helpful to the debate.

Crann na Beatha

This post has been deleted.

IrishQFA

Yep, quite correct - not VERY recently - but, there are still a massive number of public servants who were employed before April 1995 (sixteen years ago) who would have been paying absolutely nothing towards their pension. The impact on a fund as one approaches retirement of 0.6% on the fund as opposed to on average a 7.5% of salary contribution would normally be a lot more.

namenotavailablE

My understanding is that the public service pension levy is approx 7.5% on average but there are variances here too as there is a smaller % paid up to a certain level and then another level with anything over 20k being hit with 10% as a max.

The levy rates are 0% on first €15000, 5% on the next €5000, 10% on the next €40000 and 10.5% thereafter. However, don't forget that public servants also pay the 'old' contributions (called superannuation/ spouse & children and a variety of other terms). The rate they pay depends on whether they were employed pre or post-April 1995 (different formulae apply)- in general (there may be exceptions), pre-April 1995 staff pay approx 6.5% of salary; there is a different formula for post-April 1995 staff so the % varies based on income.
I think that you are omitting these contributions in your evaluation.

namenotavailablE

there are still a massive number of public servants who were employed before April 1995 (sixteen years ago) who would have been paying absolutely nothing towards their pension

Is this correct? I am a pre-1995 employee and I have always paid 6.5% of gross pay. Are there certain exempt categories? Possibly civil service rather than public service?

IrishQFA

Veles wrote: »

So what happens if you emigrate and have absolute no conviction to ever come back to this country?you lose out on this money paid into this "scheme"?

If that was me I'd be transferring my pension to my new country of residence - you can transfer your pension to most countries in the world without too much trouble but normally you will need to have something set up in your new country first so there is an eligible scheme to send it too.

IrishQFA

namenotavailabl wrote: »

Is this correct? I am a pre-1995 employee and I have always paid 6.5% of gross pay. Are there certain exempt categories? Possibly civil service rather than public service?

Afraid so - my understanding is that it depends on what type of public servant you are - the rules are not standardised across the board. In a lot of cases all that was being deducted was for "widos and orphans" which is essentially a Death in Service benefit and not really a pension.

IrishQFA

namenotavailabl wrote: »

Is this correct? I am a pre-1995 employee and I have always paid 6.5% of gross pay. Are there certain exempt categories? Possibly civil service rather than public service?

Hi again
Just looked at some old payslips for my wife (a nurse at the time) and prior to the public service pension levy she paid approx 5% towards her pension. I know a postman who paid something like 1.65%. So it does seem to differ greatly.
The important point here though is, regardless of whether it was 1.5% or 6%, even when you add an average of say 7.5% to this figure the public sector pension is far superior to those in the private sector when it comes to "value for money". I did figures earlier for someone paying 7.5% in total - after 40 years this gives them a pension of less than 12% of salary in the public sector (based on growth rate in fund of 6% p.a. and increase in salary/premiums of 3% p.a.) So if you were even to add 6 to 7.5% and get 13.5% as a "contribution", you would still be falling well short of the 50% of Salary as a guaranteed pension at retirement that those in the public sector enjoy. In the private sector such a contribution - for the full 40 years of service - would give, and I'm estimating here, a pension of somewhere around 21.6% of final salary. The unfortuante thing is that many people in the private sector realise this only when it is too late and face a massive struggle. In the public sentor the compulsary nature of the pension avoids this shortfall in retirement.
I hope this has been helpfull.

ssbob

IrishQFA wrote: »

Hi again
Just looked at some old payslips for my wife (a nurse at the time) and prior to the public service pension levy she paid approx 5% towards her pension. I know a postman who paid something like 1.65%. So it does seem to differ greatly.
The important point here though is, regardless of whether it was 1.5% or 6%, even when you add an average of say 7.5% to this figure the public sector pension is far superior to those in the private sector when it comes to "value for money". I did figures earlier for someone paying 7.5% in total - after 40 years this gives them a pension of less than 12% of salary in the public sector (based on growth rate in fund of 6% p.a. and increase in salary/premiums of 3% p.a.) So if you were even to add 6 to 7.5% and get 13.5% as a "contribution", you would still be falling well short of the 50% of Salary as a guaranteed pension at retirement that those in the public sector enjoy. In the private sector such a contribution - for the full 40 years of service - would give, and I'm estimating here, a pension of somewhere around 21.6% of final salary. The unfortuante thing is that many people in the private sector realise this only when it is too late and face a massive struggle. In the public sentor the compulsary nature of the pension avoids this shortfall in retirement.
I hope this has been helpfull.

Thanks for pointing this out, fair play for doing the calcs, this leads me to believe that the govt may levy another 1% on us at budget time to make up for the shortfall in pensions funds!!!

They should just make pension contributions compulsory and tax free up to a maximum of 10% per annum or thereabouts.

al30

allycavs wrote: »

After attempts to encourage young people to start a private pension as the Government wont be able to afford to pay a good pension when we retire they have since hit pensions with the universal social charge. And now Fine Gael (the guys that promised cuts as opposed to extra taxation are now putting a further 0.5/0.6% tax on pensions)

This isn't even a levy on the the growth in your pension. So if your pension is declining you will be hit with a further decline thanks to this new levy. This is disgraceful. What happened to reforming HSE, government cuts, and stabilising payments. Look at what the top brass in the ESB, Bord Coillte and so on earn. Why not hit the public service with the same levy!! Their pensions at retirement time are guaranteed to be a 66% percentage of the salary they retire on. Us in the private sector have no guarantee so what ever.


Why do we just take this painful medicine with out ever showing our frustration. We should be marching on the streets!!

Were you not living in this country when they hit the public sector two years ago with over 7%, I pay more in pension levy then I contribute to it, and no I am not on a big wage and no I won't get a big pension

ssbob

al30 wrote: »

Were you not living in this country when they hit the public sector two years ago with over 7%, I pay more in pension levy then I contribute to it, and no I am not on a big wage and no I won't get a big pension

al30, if you are on defined benefit then you are guaranteed a certain pension, I think most public servants are guaranteed 50% which is a big pension considering the values of funds nowadays.

Lay your figures out and let other people decide how big or not your pension is. Nobody is denying the fact that you pay a pension levy but in return for what you are getting it is still an extremely generous deal you have.

al30

ssbob wrote: »

al30, if you are on defined benefit then you are guaranteed a certain pension, I think most public servants are guaranteed 50% which is a big pension considering the values of funds nowadays.

Lay your figures out and let other people decide how big or not your pension is. Nobody is denying the fact that you pay a pension levy but in return for what you are getting it is still an extremely generous deal you have.

45 yrs old, 35.000 and 8yrs in public sector which people told me i was mad to go into cos you don't get bonus's, christmas parties etc and now everyone wants to be in it, Wont have the 40 years done that you need to have a good pension

Box09

Incorrect - Defined Benefit are not guaranteed. 80% of DB plans are underfunded so most people will not get what they have been "promised".

ssbob wrote: »

al30, if you are on defined benefit then you are guaranteed a certain pension

Box09

The pension levy is tax deductable

ssbob wrote: »

Just to clarify here, in a former life I was employed by the HSE in the capacity of a wages and salaries manager. Basically all of the staff were paying contributions towards their pensions somewhere in the region of 6% of their salary per annum. They have a rosy deal as their pensions are guaranteed but lets not get caught up in saying they pay nothing. They are also paying the pension levy now which is not tax deductible as far as I am aware.

ssbob

Box09 wrote: »

The pension levy is tax deductable

Thanks for that.

ssbob

Box09 wrote: »

Incorrect - Defined Benefit are not guaranteed. 80% of DB plans are underfunded so most people will not get what they have been "promised".

I was specifically talking about publec sector which is guaranteed by the govt so yes they will get what they are promised and for the other underfunded pensions then I believe in certain cases your company will be liable to make up the deficit if that was the agreement first day.

ssbob

al30 wrote: »

45 yrs old, 35.000 and 8yrs in public sector which people told me i was mad to go into cos you don't get bonus's, christmas parties etc and now everyone wants to be in it, Wont have the 40 years done that you need to have a good pension

Hi Al, if you work until you are 68(new retirement age) then you will have 31 years service so you will be entitled to 31/80 of your finishing salary or 39% pension, you can increase this by buying back service in the future if you like.