Pension Levy/Commercial Court/ & Others
PENSION LEVY HERE FOR LIFE!!!
2.53% IN JAN 2015:
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Pensions permanently reduced by the imposition of Government Stamp Duty Pensions Levy [renamed wealth tax]
In January 2015 IASS pensioners saw a cumulative reduction in income for life for the pension levy of 2.53% following the implementation of the Budget 2014 increase cut from 0.6% to 0.75%.
This is reflected in your net figure for pension as well as the MFS Section 50 Debt repayment. Always keep your December 2014 statement showing the split.
In March 2014 IASS pensioner members (excluding beneficiaries such as spouses/children) saw their pensions in payment PERMANENTLY reduced by 1.8%. A year earlier in March this increase was 1.2%. This reflects the Government Stamp Duty Levy on the scheme's assets.
The Chairman of Trustee of the Irish Airlines (General Employees) Superannuation Scheme had advised pensioners that the Finance (No. 2) Act 2011, which was signed into law in June 2011, introduced an annual levy of 0.6% of the market value of the assets held in pension schemes in Ireland. This Stamp Duty Levy will apply for a four year period 2011 to 2014 but the deduction from pensions-in-payment is a permanent reduction of 0.6% - cumulative 2.4%.
On 30 January 2014 a Statutory Instrument S.I. No. 71/2014 - Occupational Pension Schemes (Revaluation) Regulations 2014 declared the revaluation/increase of pensions for deferred pensioners' of 0.5% for 2013 (+1.7% for 2012).
Budget 2014 increased the last year of the 0.6% levy to 0.75% and introduced an additional 0.15% levy for 2015.
RASA did write to the Minister for Finance protesting at the imposition of the temporary Stamp Duty Pensions Levy on the assets of our scheme originally for four years up to 2014 but extended to 2015. As already stated this is in fact a permanent for life reduction in pension for pensioners.
ANOTHER CUT TO YOUR PENSION NEXT JANUARY 2015 -
0.75% PENSION LEVY ON IASS IN SEPTEMBER 2014.
RASA copied many politicians, the employers and the Trustees on correspondence on this issue. From replies received it is obvious that many government TDs were not aware of the implications of this Stamp Duty Levy on pensions in payment and we did try to clarify the scale of the problem for them. A number of politicians replied to say that they would contact the Minister for Finance on our behalf.
Members of the Irish Airlines Supplementary Personal Pension Plan [SPPP], set up in 1995 to allow for additional voluntary contributions to cover other earnings such as shift/roster and social welfare integration offset, will have noticed the deduction of this 0.6% Stamp Duty Levy.
The Trustees of the Aer Rianta Supplemental Superannuation Scheme informed pensioners in January 2012 that there will be an ongoing permanent reduction in their pensions in payment of 0.6% in the same manner as income tax/PRSI rather than making an up- front deduction from pension. The Aer Rianta Supplemental Superannuation Scheme, which operates on a defined benefit basis, was established with effect from 1 April 2001 to provide supplementary retirement benefits for its members.
Commercial High Court hearing - Aer Lingus Proposed Reduction in Share Capital.
On July 31 2012 RASA was represented by Senior Counsel and legal advisers at a High(Commercial) Court hearing following a public request for submissions from interested parties in relation to IASS Defined Benefit pension deficits. The legal advisors assisted in the preparation of an affidavit to the Court on behalf of a named individual, Paddy McGann, the Vice Chairman of RASA.
The ruling of the High Court stated that the Trustees of the IASS were entitled to object to the reduction in share capital as contingent creditors. There was a reserved judgement for the application for approval to reduce the capital of the company i.e. the resolution to reduce the capital of the company subject to a condition that the petitioner provide for such potential claimants as is referred in the Company's Annual Report 2011. The High Court on March 13 2013 said Aer Lingus Pension Funds Trustees must get prior notice of a proposed €500 million change in the company’s reserves and on March 15 2013 the Court confirmed that the capital reduction is subject to a condition and the Trustees of IASS be provided with a prior notice before distributing any capital. RASA Pension Sub Committee attended all the High Court hearing go to www.courts.ie or see attached*
Over the last number of years RASA has incurred significant expenditure on legal advice/fees on behalf of members.
The Pensions Authority (formerly Board) Minimum Funding Standard.
June 30 2013 was the deadline for submission of funding proposals to the Pensions Board [subsequently renamed The Pensions Authority] to the statutory Minimum Funding Standard. The trustee indicates that they "...may have to take unilateral action ...to address the deficit which would almost certainly have to include a reduction in the benefits of active and deferred members without being able to take account of any additional funds that may be made available by the employers.....". Section 50 of the Pensions Act is available for this purpose. Go to the www.pensionsauthority.ie to read the guidelines.
The Trustee is engaged with the Pensions Authority (formerly Board) on the deficit issue and possible proposal to meet the Minimum Funding Standard. In the middle of July 2013 The Pensions Authority did state that the length of time, of seventy years, before the scheme would meet the funding standard is not acceptable for a funding proposal. This is being addressed by the employers, Trade Unions, advisors and the Trustees. Work is still continuing to develop a portfolio that will deliver the employers Freeze and De-risk proposal. A further proposal to address the deficit was outlined to Employers/Trade Unions made in October 2013 as previously mentioned and revised in February 2014.
None of these possible proposals provide for funds to be directed into the Irish Airlines (General Employees) Superannuation Scheme.
Irish Sovereign Annuities
In 2012 Irish Pension Authority announced that Sovereign Annuity Regulations are now in force. it was not till the end of December 2012 when sovereign annuity products became available. Details can be seen on the Irish Pensions Authority website: see FAQ Version 2 issued January 2013
http://www.pensionsauthority.ie/en/Regulation/Sovereign_Annuities/FAQs_for_Trustees_on_Sovereign_Annuities_2013.pdf
OECD Review of the Irish Pensions System is published
Early 2012, following a request from Government, the OECD started a review of the totality of pension provision in Ireland - State, private, occupational and public sector. RASA made a submission to the OECD. The OECD report published in April 2013 can be found on their website above.
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The resolution of the funding of our Defined Benefit Pension Scheme and the protection of accrued benefits for all scheme members is critical.
RASA continues to take whatever action is deemed appropriate to pursue this objective.
March 2014.
RASA - Pensions Sub Committee
Sub Committee Members are drawn from RASA Executive and the general membership: P Kilduff (Secretary)