The introduction of a 0.5% pensions levy on accrued funds risks exacerbating funding shortfalls in Ireland’s defined benefit schemes, the Irish Association of Pension Funds (IAPF) has warned. Jerry Moriarty, director of policy at the IAPF, said that ”while all policy options were up for discussion, as Fine Gael was expected to negotiate a coalition agreement, the organisation was still opposed to any such levy". "The defined benefit schemes are in deficit, and if they have to pay out to the government, then that’s only going to make the deficit worse," he said, echoing recent criticism from IAPF chairman, Marie Collins, where she rebutted the claim that a levy enjoyed industry support.
On the future of the remaining assets held by the National Pension Reserve Fund (NPRF) – much of which has been used to support Allied Irish Bank and Bank of Ireland's bailouts – the IAPF's Moriarty was less than optimistic. "There's no discussion about whether it should be spent or not – it was a case of how it should be spent," he said of the rhetoric during the recent election campaign, adding that there seemed to be a "very strong view" that the next series of stress tests on Irish banks would reveal further need for recapitalisation.
Fine Gael's manifesto proposes the creation of the New Economy and Recovery Authority, in charge of the sell-off of a number of state-owned companies. It would also see the NPRF's Commission – in charge of investment decisions – folded into the new authority.
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