INMO, Pension Fund Administrators Must Absorb the Pension Levy

The Irish Nurses and Midwives Organisation (INMO), in a statement today said that workers should not tolerate any attempt by their pension fund administrators to pass on the 0.6% job creation fund tax levied by government. The INMO confirmed that they have raised the issue with their own staff pension fund administrators and with AVC providers to their members.

The levy will be imposed on the trustees or administrators which in the majority of cases is the Insurer or Life Company. The levy is not imposed directly on the member or the members fund and the Government must not provide for any such option. The industry, based on a previous levy imposed 1998, are presuming they will be given such an option and have run a slick campaign suggesting no other choice.

Dave Hughes, INMO Deputy General Secretary advised, “Worker appointed trustees to all funds must immediately convene meetings with the pension companies administrating their funds and demand that they absorb the charge, from what are substantial fees charged by the industry.”

Since the announcement of the government’s jobs initiatives, the pension industry, through highly articulate spokespersons, have managed to convey the impression that this payment towards the Nation’s recovery must be extracted from the contributors to pension funds. Mr Hughes says the levy should be taken from the profits of the pensions industry or more appropriately their marketing and hospitality funds which, according to Mr. Hughes, are wholly unnecessary in the current climate.

Commenting on the issue, Mr Hughes said: “The impression has been conveyed that every private sector worker in the country will have to pay this levy when, in fact, up to 70% of private sector workers are not covered by occupational pension schemes at all.”

Mr Hughes went on to say; “The industry had over recent decades persuaded many workers to opt for defined contribution rather than defined benefit schemes, suggesting they provided richer returns. They then played the markets in a manner unbecoming of an industry charged with the responsibility of providing security for its customers. So bad has the management by these pension companies been, that many defined benefit schemes have required massive injections of additional funds to meet their commitments, in spite of years of high profits for the administering companies themselves.”

Mr. Hughes said the INMO had contacted the administrators of its own staff pension funds and the administrators of AVC funds for nurses and midwives and made it clear to them that the industry must take the hit with this relatively small levy and display that they are capable of acting in the National interest.

Government need not give the option to pass this tax to the consumer and the INMO now call on the Minister for Finance to legislate in the interest of fund members.

Nurses and Midwives have had to endure a pension levy, pay cuts and increased taxes. They and other workers need to see that the companies they do their business with are also prepared to contribute to our National recovery.

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