Pension crisis highlights flaws of raiding retirement funds

The ever deepening crisis in the funding of pension schemes highlights the complete folly of the government’s €2 billion raid on private pension schemes, according to Sligo-North Leitrim Fianna Fáil Senator Marc MacSharry.

The ever deepening crisis in the funding of pension schemes highlights the complete folly of the government’s €2 billion raid on private pension schemes, according to Sligo-North Leitrim Fianna Fáil Senator Marc MacSharry.

Senator MacSharry said: “The Pensions Board has confirmed that 80% of defined benefit pension schemes are in deficit. In other words, they haven’t enough money to pay out the pensions that were promised to the members of the scheme, effecting people across Sligo, Leitrim and the north-west.

“The Chief Executive of the Pensions Board has said more schemes face the prospect of being wound up and in other cases members will get reduced benefits. Incredibly the Government’s response to the funding crisis has been to impose a 2.4% levy over a period of four years, taking up to €2 billion out of schemes already under the water. This is making the situation much worse,” he said.

“The Government pressed ahead with the €2 billion pension levy last summer despite warnings from the Pensions Board, senior civil servants, the Troika and Minister Joan Burton, about its implications. I pointed out the dangers involved in this move myself but the Government ignored everyone.

“The Government collected over €460 million from the levy last year, and a similar amount will be collected this coming September and again in 2013 and 2014. I think it’s important to point out that the pension levy was one thing that was not promised by Fine Gael and Labour in the election but it was among the first things introduced when they came to power.

“Fine Gael and Labour seem totally oblivious to the damage the levy is doing to the confidence of ordinary people in Sligo, Leitrim and across the north-west in their efforts to save for the future through a pension scheme. The pension levy raid was, in effect, the Government taking some of the private savings of citizens.

“The government has promised that this levy will finish in 2014, but I know there are many people in the north-west who are very sceptical about this. The pension levy is an example of this government making decisions which buys them time in the short term, but which will actually have a very damaging impact on the economy over the longer-term.”