LETTERS TO GOVERNMENT MINISTERS ON RECOVERING PENSION LEVY DEDUCTIONS.

RETIRED AVIATION STAFF ASSOCIATION

COMHLACHAS IAR-FHOIREANN EITILEORACHTA

A.L.S.A.A. COMPLEX, DUBLIN AIRPORT, IRELAND

Website: https://sites.google.com/site/retiredaviationstaffassoc/

5^th June 2015

Mr Michael Noonan, T.D., Minister for Finance

Mr Brendan Howlin, T.D., Minister for Public Expenditure and Reform

cc. Ms Joan Burton, T.D., Minister for Social Protection

cc. Mr Pascal Donohoe, T.D., Minister for Transport, Tourism and Sport

Dear Minister,

Pension Levy as part of the Stamp Duty Consolidation Legislation – Pre Budget Submission 2016

RASA represents former retired staff of Aer Lingus, DAA, SAA and SR-T. Last September 2014 we wrote to you requesting the permanent abolition of the imposition of the indefinite deduction of the pension levy from our monthly pension income.

The media are now reporting that under a new Public Service Stability Agreement 2013-2018 known as the Lansdowne Road Agreement it is proposed to reduce the pension levy deductions applied under FEMPI for public sector employees.

We must remind all that RASA retired pensioners have also been affected by the austerity programmes and seen substantial cuts hitting our everyday lives, including a Pension Levy in 2011 on our pension fund assets. While technically this was calculated for five years on our pension fund assets this stamp duty pension tax was passed on to RASA pensioners as an indefinite deduction for the rest of their lives.

Most of the pensionable service years of RASA retired pensioners were earned while employed in the public sector and subject to public sector sanctions but none of the public sector threshold pension levy exemptions have been applied, instead it is being actuarially administered as an indefinite monthly deduction on all our monthly income.

Some of the austerity hardships and cuts since 2007 were identified in our letter to you last 5^th September 2014 (copy attached) when we wrote to you in relation to the imposition of the Stamp Duty Pension Levy. However since then we suffered more deductions to our IASS pensions in payment without any compensation or mitigation.

In fact over the last eight years IASS pensioners in receipt of their pensions have endured

· Monthly pension income frozen at April 2007 levels

· No increases

· CPI indexation taken away forever

· Permanent 2.53% stamp duty pension levy imposed as an indefinite deduction for our lifetime

· The loss of the 100% legislative protection/cover for all of our pension in payment

· Actuarially calculated MFS Section 50 Debt repayments imposed of up to 20% cut to our monthly income. This is a debt we did not know we had

· Permanent reductions of IASS pensions in payment imposed without compensation or mitigation

· Further reductions to monthly pension income threatened over the next 25-year period

In effect there is absolutely no financial security or confidence that our pensioners will have any income left to live on having provided this second pillar of savings from our earnings over a working lifetime of up to 45 years for when we were no longer in employment.

We are requesting that you now consider making provision for the recovery of the 2.53% Stamp Duty Pension Levy in Budget 2016. We are proposing that consideration be given to doing this via the taxation system, for example by way of possible exclusion of this 2.53% Pension Levy from Reckonable taxable earnings, or tax credits or another such taxation measure.

We look forward to seeing the recovery of this deduction in our income in 2016.

Yours sincerely

Arthur McSwiney

Chairman

============================================================================

Letter to Ministers regarding Pension Levy and Reply from Department of Finance - September 2014

============================================================================= RETIRED AVIATION STAFF ASSOCIATION

COMHLACHAS IAR-FHOIREANN EITILEORACHTA

A.L.S.A.A. COMPLEX, DUBLIN AIRPORT, IRELAND

Website: https://sites.google.com/site/retiredaviationstaffassoc/

5^TH September 2014

Mr Michael Noonan TD

Minister for Finance

Department of Finance

Merrion Street

Dublin 2

Mr Brendan Howlin TD

Minister for Public Expenditure and Reform

Department of Public Expenditure and Reform

Merrion Street

Dublin 2

cc Ms Joan Burton TD

Tánaiste and Minister for Social Protection

Dear Minister

Submission to the Department of Finance and the Department of Public Expenditure and Reform re Budget 2015: The Pensions Levy

RASA represents retired staff of Aer Lingus, Dublin and Shannon Airport Authorities and SR Technics.

We wish to remind you of your commitment that the original Pensions Levy would be in place for the fixed four-year period 2011-2014.so that it will not apply in 2015. That original Levy was augmented by 0.15% to apply in 2014 and 2015 and to make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties.

In our case, as in many others, the Defined Benefit Pensions Schemes to which we contributed in good faith have performed poorly and are at risk of restructuring or wind-up as they do not meet the requirements of the Pensions Authority. As you know, your Government has diluted the protection previously afforded to pensioners and facilitated reductions in pensions in a Section 50 reconstruction of a DB scheme and in the event of a wind-up.

The poor performance of the funds is exacerbated by the Pensions Levy which has reached a cumulative percentage of 2.55%. In our case, as in others, the pensions fund could not absorb the Levy and it is being passed on to the pensioners as a permanent deduction. As you know, though some of your TDs and Senators seem impervious to the information, the Levy is not a once off tax but is a permanent diminution of pensions for all time.

The composite annual return on the our members’ principal pensions scheme, the Irish Airlines (General Employees) Superannuation Scheme (IASS) over the 5 years to 31 March 2013 was only 2%. So the Levy to date has lost the Scheme more than a year’s full income.

While we have always regarded the Levy as an iniquitous imposition, it is particularly so now when interest rates are at an all-time low and the Pensions Authority is effectively forcing pension investment policies to sovereign bonds. With the 10-years bond yield at 1.8%, any renewal of the full Levy would be high proportion of the Scheme’s income. Even a 0.15% levy is significant. And, remember that pensions from the Scheme are fully subject to Income Tax and to the Universal Social Charge.

Aside from the implications for our members, we believe that the Pensions Levy and its arbitrary introduction are a major disincentive to people taking up pensions, contrary to the Government policy of expanding pensions coverage

You will be aware that this Levy is opposed by an unusually wide range of organisations, ranging from trade unions to pensioner organisations to trustees of individual schemes to the Irish Association of Pension Funds to the Society of Actuaries and to IBEC.

Pensioners have been targeted recently by successive governments in so far as:

(1) The over 70s lost their medical cards and the criteria for medical card then made more severe

(2) Medical insurance premiums have increased enormously

(3) Tax Credits, in particular the Age Tax Credit, have been reduced

(4) The imposition of the Universal Social Charge

(5) Significant cuts to the Household Benefits Package

(6) Adverse changes to community support for older people

(5) The Pensions Levy

With a welcome turning of the tide re the economy now becoming evident, we see a strong case for beginning to turn the tide for the members of pension’s funds by the full and permanent removal of the Pensions Levy.

Yours Sincerely,

Arthur McSwiney,

Chairman

============================================================================

REPLY FROM MINISTER'S PRIVATE SECRETARY

An Roinn Airgeadais Oifig an Aire

Department of Finance Office of the Minister

Sráid Mhuirfean Uacht, Telephone: 353-1-676 7571

Baile Átha Cliath 2, Facsimile: 353-1-676 1951

Éire. LoCall: 1890 66 10 10

VPN: 8109

Upper Merrion Street, http://www.irlgov.ie/finance

Dublin 2,

Ireland.

Our Ref. 14/3521/MF

23 September 2014

Mr. Arthur McSwiney

Chairman

Retired Aviation Staff Association

paddykilduff@ymail.com

Dear Mr. McSwiney

The Minister for Finance, Mr. Michael Noonan TD, has asked me to acknowledge receipt of your recent letter received by email on behalf of the Retired Aviation Staff Association and to say that the contents of your letter will be considered in the context of the forthcoming Budget.

Yours sincerely

Alex Lalor

Private Secretary