FF proposes referendum to stop raids on pension funds

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It's probably a good idea to give protection in the constitution.

The raid by Noonan would have damaged confidence in pension funds and discouraged some people from contributing.

In theory, it's not a good idea to tie the government's hands in these matters. But, in practice, it's probably necessary.

Whatever way you look at it, it's clever politics in that it highlights one of Noonan's big mistakes.

Brendan
 
You'd think if they get into power and call referendum it'd surely be a shoe-in. Can't imagine why anyone would vote against it....
 
People might vote against it because:
a/ It's FF
b/ they work in the hospitality industry who directly benefited from the raid, or so it is claimed!
c/ they have a PS pension and so this type of raid did not affect them
 
If the Referendum 100% protects Pension Pots ,it means we in future will have to trust FF or Fg or whoever is in power not to change pension rules.
Therefore it should not be carried .
Examples after Referendum..
1. Government changes pensions to allow someone who fell into a large inheritance to not pay any Tax on inheritance if he puts it all in a Pension Pot.
(this boyo will probably have been a FF or FG friend)
2. FF or FG permit the (smart boys) to defer all taxes if their profits are put into pension pot.
3. Methinks we have had nuff of that kind of stuff.!
 
I don't think the Constitution is the proper place for tax rules - or judge's pay for that matter
 
Brendan Burgess said:
I agree in theory. But in practice, I think that a discipline must be put on Ministers for Finance.

Brendan
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Provided we don,t leave an opening for Politicians to change ground rules on what can (fairly) constitute pension funds.
I would be very afraid that our Politicians would tweak short -term rules to suit their friends ,and the next elected Politicians would if pension rules needed changing ,ring their hands saying {its a constitutional matter}
Disciplining Ministers of Finance comes up against their short -term thinking between elections.
The blunt robbing of mostly modest pension pots was cynical opportunism.
 
My understanding is that the pension levy was assumed by people in the pension industry to be unconstitutional.

Property ownership is protected under the constitution. This law has been used to protect DB pensions even though the DB pension wasn't funded by the employee - the argument I think was was the employee was given ownership of 1/80 of final salary every year, the employer couldn't retrospectively take away that property. With a DC pension the ownership issue is much clearer.

Clearly for a levy of 2.7%(?) no single individual felt it worthwhile to fund a legal case, and they kept the pension companies onside by threatening them with an alternative which was to reduce tax relief.

I don't see much point in explicit constitutional protection as I'd fully expect someone to word their way around it if the need arose. Also you won't fully protect people saving for a pension as the alternative threat to remove/reduce tax relief can't be protected via the constitution since that (like it or not) has to left in the government hands.
 
ashambles said:
This law has been used to protect DB pensions even though the DB pension wasn't funded by the employee - the argument I think was was the employee was given ownership of 1/80 of final salary every year, the employer couldn't retrospectively take away that property.
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I'm not sure what you're saying here - it's not the employer taking anything away - it's the government. I'm a (deferred) member of a DB scheme and the trustees wrote to the members saying the scheme wasn't in a financial position to absorb the levy that the government was taking - so they had no choice but to pass the cost on in the form of lower benefits. I will have a permanent reduction of 2.5%-ish of every payment I get in retirement.
 
I would have thought that in a democracy, the elected government has the right to levy charges and taxes as it sees fit - isn't that the very essence of representational government?

Having a referendum vote on every last policy decision, tax matter et al would be a complete waste of everyone's time not to say how in-efficient it would be. If we don't trust the government - then don't elect them. Town hall meetings to run something are fine in a village but I can't imagine anyone wuld want to run a country, even a small one like Ireland, that way.

If the electorate can't be assed to hold politicians to their responsibility, then that's tough on them. We certainly get the politicians we deserve - I won't mention names but just look around at those that get elected after having made a hash of things over and over again. It's about time the country grew up and left gombeen politics where it belongs - in the mud!
 
jpd said:
If we don't trust the government - then don't elect them..
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FG didnt exactly advertise on their election manifesto that they would raid our pensions in the event of an economic downturn! If they had, I'm fairly sure less people would have voted for them. Its impossible to know in advance what ideas they will drum up once in power....
 
Brendan Burgess said:
It's probably a good idea to give protection in the constitution...
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Given what has happened, I think it is essential to help restore confidence.

However, it is only one part of what is needed (now), to get everyone saving for their retirement and reduce the future financial burden on the country.
 
Sarenco said:
They did actually! It's on page 67.
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"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. An equivalent reduction could be applied to public and private sector defined benefit entitlements"
So what came to pass was (a) higher and (b) applied to private DC funds and private DB entitlements - but not public sector entitlements...
 
Yup. Originally introduced in 2011 at an annual rate of 0.6%, effectively increased to 0.75% for 2014 and then reduced to 0.15% for 2015 before being finally abolished. The State expropriated well over €2 billion of private assets under the guise of this "levy".

Don't get me wrong, I thought it was a grotesque measure that was almost certainly unconstitutional but FG did flag a raid on private pensions in their manifesto. This was to counter FF's proposal to reduce relief on contributions to the standard tax rate.

TBH I would find it extremely difficult to ever vote for FG solely as a result of this decision. It was truly shocking to me to think that the Minister ever thought it was appropriate to expropriate private assets to, amongst other things, fund a tax break for newspapers.

Of course, nobody that was involved with this decision will ever feel its effect.
 
I know, it's weird to step back in time and look at a manifesto from the last election. A four year "levy" on private pensions averaging 0.54% p.a. is pretty much what FG promised us. Sadly.:(
 
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