Put it this way, OkeyDokey, my pension fund has not recovered yet to the amount I contributed. That is before considering the losses due to inflation, or the interest I would have gained had I put the money into the bank.
I am being taxed on a loss.
The levy plus management charges strips out any possible growth in my fund.
Techless,
Points 1, 2 and 3 I understand.... Point 4... that this levy will be used to other DB schemes like ESB etc... This I dont understand..
How can this be so?
Bronte, if I have paid in €17,000 and the value of the pension fund is now €16,000, that, to me, is a loss.
If we were talking Capital Gains or losses on an investment, no-one would dispute that there was no gain to be taxed.
It adds insult to injury to have to pay this levy when the pension is worth less than my original investment.
While I don't agree with the levy, in reality it pales into insignificance compared to the impact of decisions regarding fund choice and charges. For example, the difference between charges for a managed fund versus a consensus fund would be about 0.1% pa. Very similar to the levy.
I wonder how many people who are complaining, have the optimum selection with regard to the charges paid for their pensions ? Do they know exactly how much of every €100 they put into pension, actually gets into their fund ? Sometimes the important issues get lost in the small detail.
Not really the point is it though. You can argue about the level of fund charges but you can't deny there is a cost to pension providers for providing the service. No different to banking fees.
What does the levy pay for? A VAT decrease for the Tourism sector? Why should I pay for that just because I have pension while all those people who don't have a pension don't pay for it. I used to think people without pensions were foolish. Beginning to wonder now who is the foolish one. It's only takes a sma leap of imagination to see the Government to do an Argentina on it and nationalise pension funds.
It's not the cost of the levy. It's the concept that I have an issue with.
Is this levy not against the Constitution ?
The difference is DIRT is tax on the interest earned from savings, an equivalent to the levy would be government taking 0.6% of a persons savings - and then DIRT etc from the interest.Would think he would have taken legal advice i relation to this? and property rights relating to pensions,would think that its similar to DIRT?
So it's probably unconstitutional but the pension industry aren't minded to challenge
"Commission cream" is not a technical term I presume?
The problem is not with '0.15% in 2015'; the problem is the principle of raiding locked-away money. The levy was initially 0.6% - it could easily go back to that level again; or 1% - why not? So a contribution in 2013 might 'only' be hit by 0.75% in 2014 and 0.15% in 2015; but what can a person do to rescue their 2013 contribution if the levy goes back up to 0.6% in 2016 and remains there until retirement in 20/30/40 years time? Absolutely nothing.The pension levy - particularly at 0.15% from 2015, and especially when compared with DIRT / exit tax at 41% - won't, and shouldn't, influence pension savings habits,
Say I have €100 to put away for 40 years and can get a long term rate of 3% on deposit savings gross of tax.
If PRSI didn't apply and DIRT was 20% (as it was a few years ago), I'd have €258 after 40 years.
Applying a total of 45% PRSI and DIRT (current situation), I'd have €192 after 40 years.
In other words, the increased taxes on deposit interest of late have effectively knocked 25% off my ultimate proceeds, this is far worse than even a 0.6% levy over the same period.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?