0.6% Pension Charge and the potential knock on effects . .

Drumpot

I know its been discussed here before, but I think this charge once again highlights the lack of vision or understanding our existing (and previous) government have with economics.

It always came across as an ill conceived idea from an incompetent, ill qualified department of finance that has done little but get things wrong for some time, with absolutely 0 accountability . .

I dont blame concurrent governments for getting bad advice, I blame them for taking this advice and not looking to get more able/educated people into the department of finance.

Whatever anybody says about this Pension charge (people who have no defined contribution pensions will not care much either way), I know tax advisers looking at ways of getting pension monies outside of Ireland so that their members can avoid this tax.

I know one person moving 1million out of their Irish Pension.This isnt just money not being taxed by our government, it also reduces the profits of insurance companies and effects irish jobs as if the Pensions industry is seriously imacted by mass transfers out, there will be negative repurcussions twofold (jobs and tax). That doesnt even include the amount of people who will stop contributing or setting up Pension plans!

One of the biggest problems with this and most governments is their inability to consider the potential ramifications of their ill conceived ideas. But I suppose we shouldnt be surprised as I cant think of any of my previous school teachers that I would want in a high position with the Irish cabinet let alone in departments that require good understand of economics. . .

Well played FG/Lab for lowering the bar even further . . I couldnt have a lower expectation of an Irish government if they continued to let incremental increases continue within our public service . . Wait a minute . .

Cookie_Monster

Drumpot wrote: »

One of the biggest problems with this and most governments is their inability to consider the potential ramifications of their ill conceived ideas.

Irish governments have never been able to look pas the next election, the above is a great example. Short term gain at a much bigger long term cost

Godge

Drumpot wrote: »

I know its been discussed here before, but I think this charge once again highlights the lack of vision or understanding our existing (and previous) government have with economics.

It always came across as an ill conceived idea from an incompetent, ill qualified department of finance that has done little but get things wrong for some time, with absolutely 0 accountability . .

I dont blame concurrent governments for getting bad advice, I blame them for taking this advice and not looking to get more able/educated people into the department of finance.

Whatever anybody says about this Pension charge (people who have no defined contribution pensions will not care much either way), I know tax advisers looking at ways of getting pension monies outside of Ireland so that their members can avoid this tax.

I know one person moving 1million out of their Irish Pension.This isnt just money not being taxed by our government, it also reduces the profits of insurance companies and effects irish jobs as if the Pensions industry is seriously imacted by mass transfers out, there will be negative repurcussions twofold (jobs and tax). That doesnt even include the amount of people who will stop contributing or setting up Pension plans!

One of the biggest problems with this and most governments is their inability to consider the potential ramifications of their ill conceived ideas. But I suppose we shouldnt be surprised as I cant think of any of my previous school teachers that I would want in a high position with the Irish cabinet let alone in departments that require good understand of economics. . .

Well played FG/Lab for lowering the bar even further . . I couldnt have a lower expectation of an Irish government if they continued to let incremental increases continue within our public service . . Wait a minute . .

Illogical rant. Hitting insurance company profits is a problem??????

This pension levy is a great idea. The money is invested already. Taxing it will not affect the day-to-day economy. For example adding 2% to the income tax rate will decrease spending thereby reducing VAT etc. This levy will not do that. In fact, because so much pension fund money is invested abroad the effect on the economy will be close to zero. That makes the jobs initiative look more viable.

Of course a few pensions industry heads will lose a job, but if that means they cut the costs they impose on the rest of us, so much the better.

P. Breathnach

Drumpot wrote: »

... It always came across as an ill conceived idea from an incompetent, ill qualified department of finance ...

Huh? The idea was in the FG election manifesto:

A temporary, annual 0.5% contribution for all private pension funds, so that older beneficiaries of past tax relief make some contribution to deficit reduction.

Drumpot

Godge wrote: »

Illogical rant. Hitting insurance company profits is a problem??????

This pension levy is a great idea. The money is invested already. Taxing it will not affect the day-to-day economy. For example adding 2% to the income tax rate will decrease spending thereby reducing VAT etc. This levy will not do that. In fact, because so much pension fund money is invested abroad the effect on the economy will be close to zero. That makes the jobs initiative look more viable.

Of course a few pensions industry heads will lose a job, but if that means they cut the costs they impose on the rest of us, so much the better.

Ah, sure its just a small tax on money that is doing nothing in the economy . . Seriously, its this kind of thinking that always bites governments in their asses. Presumption, with an absence of understanding what you are doing is the mother of all F**k ups.

Firstly, the presumption is that it will be a temporary tax (just like it will be interesting to see how long we will get any free water allowance under the new water system scheme) and that it wont rise. The government spent years highlighting the importance of Pensions so that when this generation retired, they wouldnt be completely relying on the state, now they do this (among other measures mentioned below).

Secondly, it could potentially ruin the pensions industry. You dont have to care about the industry to spot that it will cost jobs (thousands, not just a few bigwigs!) and ultimatley it will implode on itself as people stop taking out pensions. Ah but sure, lets worry about that when if it happens. I used to work in an Insurance company and over half the staff were there for the Pension side of things. But sure, these jobs technically isnt money doing anything for the economy . . .Right ?

Thirdly, people are moving their money abroad to avoid this tax (mainly the big earners) which means that the potential for tax will diminish substantially and as usual it will be the lowly working class that will foot this tax.

Fourthly, the government already levied the Insurance Industry (currently 1% levy on all Life Assurance premiums. They have just about closed up the PRSI and Health levy relief that people were entitled to. They have reduced the amount people can contribute to their pensions with tax relief and they have capped the fund that people can have in a Pension. I would say that the Pension/insurance industry has certainly played its part already in providing extra funding to our lame duck governments. But I am not even arguing against it for the sake of it. This is simply pushing things too far that will cost them more, then they will make in the long run. As usual, there is no foresight.

Lastly, you say most of the money is invested abroad. Why didnt the government bring in some sort of Irish bond or venture capital option to the Pensions industry and give some sort of relief to do that ? Ah but sure thats way to radical! No, just tax em and hope that brings in enough to create jobs! But wouldnt having some sort of Irish venture capital option for pensions do that ? Nah, lets just keep the control of creating jobs in the hands of our teachers government that have a vast experience in entrepeneurial management.

Huh? The idea was in the FG election manifesto:

Fair enough, so now we have an economically incompetent government and department of Finance! Great . . We never had a chance . . .

Head The Wall

P. Breathnach wrote: »

Huh? The idea was in the FG election manifesto:

You left out some of what FG had in the manifesto, the part about the PS contribution. Funny how they dropped that bit once they were in there.