What is Roisin Shortall saying?

Madd Finn

Recently dumped junior minister Roisin Shortall has discovered that more tax could be collected if there were fewer tax breaks on pension plans.

So she thought she'd mention it.

I am but a simple lad. Is she saying that those who intend saving for their own pensions, ie the self employed or private sector workers, can only do so after they have first contributed to the pensions of others?

And in the case of public-sector defined-benefits pensions (which I know are fewer in number than they once were) doesn't this mean that one must first contribute to and then guarantee the defined benefits of some other lucky bastard's scheme before one can contribute to one's own?

And by inference, doesn't this mean that in the event that one retires during a recession, like now, one must pay an increased tax burden to meet the commitments to somebody else's fixed-benefits commitments at the very time when the value of one's own pension plan has tanked?

Has this woman got a brain in her head? Or does she just think that the rest of us don't?

Good loser

Madd Finn wrote: »

Recently dumped junior minister Roisin Shortall has discovered that more tax could be collected if there were fewer tax breaks on pension plans.

So she thought she'd mention it.

I am but a simple lad. Is she saying that those who intend saving for their own pensions, ie the self employed or private sector workers, can only do so after they have first contributed to the pensions of others?

And in the case of public-sector defined-benefits pensions (which I know are fewer in number than they once were) doesn't this mean that one must first contribute to and then guarantee the defined benefits of some other lucky bastard's scheme before one can contribute to one's own?

And by inference, doesn't this mean that in the event that one retires during a recession, like now, one must pay an increased tax burden to meet the commitments to somebody else's fixed-benefits commitments at the very time when the value of one's own pension plan has tanked?

Has this woman got a brain in her head? Or does she just think that the rest of us don't?

She has brains but they are scattered.

There is always a downside cost to proposals like this. Not sure quite what they are - apart from the inequity you mention. Also there is a negative for the pension industry.

Sponge Bob

If you are rich and 'manage' your own €27m pension fund. EG 'Fingers' Fingleton late of the equally late Irish Nationwide, then you do not pay a pension levy.

Only small people whose pensions are with pension managers have to pay the levy.

Madd Finn

Sponge Bob wrote: »

If you are rich and 'manage' your own €27m pension fund. EG 'Fingers' Fingleton late of the equally late Irish Nationwide, then you do not pay a pension levy.

Only small people whose pensions are with pension managers have to pay the levy.

How come he doesn't have to pay a levy?

And if he doesn't, would extending the levy to the likes of him bring in the €200m extra revenue Ms Shortall mentioned?

Or is she really saying that tax exemptions on money set aside for pensions have to go or be drastically curtailed?

She should tell it like it is. So should her supporters.

Godge

What Roisin Shortall is saying is that those who contribute to their pensions should only get tax relief at the standard rate.

At the moment, the higher paid on the 41% rate get greater tax relief than those on the standard 20% rate. The higher paid get a bigger contribution from the government (through the tax foregone) to their pensions than the lower paid do.

This is a similar proposal to that of standard-rating the tax relief on VHI contributions some years ago. At the time is was possible for the net cost to be the same for two taxpayers, one on the higher rate, one on the lower rate, but for the higher rate taxpayer to be in the position of getting a better plan even though the net cost was the same.

This measure will hit the private sector and public sector alike. It is likely to hit the public sector harder because of the high contribution rates between the pension contribution and the pension levy. Also, a public servant cannot reduce their pension contribution while many of those in the private sector can.

The effect on senior public servants would be about the a 3-4% cut in net pay, equivalent to a 10% cut in gross rates.

The measure would provide much more net income to the Exchequer than a 10% cut in pay rates in the public sector and would be less difficult politically as it would hit higher rate taxpayers only. All in all a sensible idea.

jasonpat

The minister is worried about the downfall economy that is why he is making these statements.

Farmer Pudsey

If pension contributations were standard rated it would make no sence in the private sector to invest in a pension. You would have to pay fees and take the risk with your money. Watch the property section boom if that happens.

A more sensible idea is to limit the over all high tax rate limit on contributations or limit the value of the pension pot however the bothof these would effect public service workers and high pension contributations that are paid in directly by employers of high net worth inviduals.

SubBusted

Madd Finn wrote: »

Has this woman got a brain in her head? Or does she just think that the rest of us don't?

Who cares? Wait until the gender quota for TDs come in!

Godge

Farmer Pudsey wrote: »

If pension contributations were standard rated it would make no sence in the private sector to invest in a pension. You would have to pay fees and take the risk with your money. Watch the property section boom if that happens.

A more sensible idea is to limit the over all high tax rate limit on contributations or limit the value of the pension pot however the bothof these would effect public service workers and high pension contributations that are paid in directly by employers of high net worth inviduals.

The problem with private sector pensions and in particular PRSAs is nothing to do with whether they are standard-rated or not, the problem is the cut taken by those who provide the products. I am fed up trying to get clear information on how much is being taken out of my contributions.

It seems to me that the tax money foregone by the government is not improving private sector pensions but it is instead going into the pockets of inefficient and rip-off private sector pension providers.

It is the same with any subsidy. Property subsidies kickstarted the boom and enriched deveopers. The vast amount of money spent on the farming sector has given rise to illogical practices and lined the pockets of farmers.

Farmer Pudsey

Godge wrote: »

The problem with private sector pensions and in particular PRSAs is nothing to do with whether they are standard-rated or not, the problem is the cut taken by those who provide the products. I am fed up trying to get clear information on how much is being taken out of my contributions.

It seems to me that the tax money foregone by the government is not improving private sector pensions but it is instead going into the pockets of inefficient and rip-off private sector pension providers.

It is the same with any subsidy. Property subsidies kickstarted the boom and enriched deveopers. The vast amount of money spent on the farming sector has given rise to illogical practices and lined the pockets of farmers.

I agree with you that there is an issue with pension fund charges however if contributions were standard rated then it would be economic madness to contribute money to a fund ( even if that fund had low charges) as restrictions in the take out of funds and in having to buy an annunity far out weight the tax benifits at 20%.

However I do believe that there should be a limit in the amount that you are allowed to put in at the higher tax rate this could be set either by a lifetime tax credit that you can recieve 100% of ( if it was set a 200K and you invested 5K this year that is 2.5% of credit, next year limit 204K added on to by inflation and the sum you invest would be a % of that) 0r else/also an overall pension pot value could be allowed 1 million gives an annunity of approx 50K I think so you could set levy's or high rate tax on any funds over that. But by standard rating contributions any person who invests in a pension fund would be off their trolly.

Property subsidies were left there too long and like I have stated about farming subsidies start a thread and I will debate issue, becuase when garming practices are the same worldwide ( regulations, use of hormones/technology) then all farmers will be on a level footing

katierx

Recently dumped junior minister Roisin Shortall

She wasn't "dumped" - she resigned