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Will the Government Target Irish Pension Funds to recoup some of the PUP cost?
For those who do not remember what the pension levy was?
The pension levy was introduced under the Finance (No.2) Act 2011. Initially introduced to assist with the cost of the job’s initiative.
The Minister for Finance introduced a temporary Pension Levy of 0.6% of pension fund assets, payable for each of the 4 years 2011 - 2014 and an additional levy of 0.15% for 2014 and 2015. Therefore, in 2014 the levy increased to 0.75% and in 2015, the levy was 0.15%. The levy was based on the market value of the pension fund on 30 June each year and applied to all pension policies.
The levy has been discontinued from 2016.
Why were private sector pension funds being targeted to fund the Jobs Initiative?
• Applying a temporary levy to pension funds was perceived to be less damaging economically than raising other taxes.
• Other savings or investment products had not benefited from the generous tax reliefs that pension savings have historically been granted and continue to receive.
• Much of the value of pension funds is attributable to the rolled-up value of tax relief. The overwhelming majority of money in Irish pension funds is not invested in the Irish economy. The pension fund levy is a reasonable temporary contribution from these funds to assist in the Jobs Initiative and boost the economy at this time of national need.
Were there any exclusions from the pension fund levy?
• The levy did not apply to the assets of pension funds in respect of the provision of retirement benefits to non-resident members.
• The levy did not apply to pension funds that have already passed a resolution (before 10 May 2011) to wind-up a pension scheme and where the employer sponsors are insolvent and no longer in business.
• Public servants that were paying a “pension-related deduction”.

In 2015 it was reported that the levy has raised more than €2 billion over the previous five years, this was comparable at the time to the LPT which was raising approx. €550M Per Year. Bearing in mind the Irish pension fund assets over that period ranged from €72.3BN in 2011 to €115.8N in 2015 (Source IAPF).
The value of Irish pension fund assets in 2019 was approx. €153.9BN (more than twice what they were in 2011), so a similar style 2011 .60% levy introduced now would generate approx. €923M per year to government coffers. This could be a very quick solution for Government to recover some of the PUP cost. Will they do it?