Taxing Public sector pensions to pay for Private sector pensions?

[peadarmc]

Was anybody watching Prime Time and Fintan O' Toole? Basically the government has introduced the pesion levy (tax!)! Meanwhile the Government spend 2-3Billion every year on private pension supplementation!

Im not an economist, but is this tantamount to the government taxing the public sector to pay the private sector??

[wysiwyg]

Was anybody watching Prime Time and Fintan O' Toole? Basically the government has introduced the pesion levy (tax!)! Meanwhile the Government spend 2-3Billion every year on private pension supplementation!

Im not an economist, but is this tantamount to the government taxing the public sector to pay the private sector??

That is a big jump to make Peader.. just because tax relief is given on private sector pensions, it doesnt stand that the pension levy is taken directly to pay for this relief.

It must also be remembered that tax relief will be given on the pension levy contribution.

Basically the pension levy is another name for a tax on public servants in that it will allow the Government to keep back part of its payroll, to spend it on other things.. such as public service pay

So you could as easily have said, the pension levy is to be taken to build roads, or build hospitals, or to actually pay the workers who are paying the levy (trying to avoid the cyclical argument here)

[peadarmc]

yea i understand that completely! I didnt mean that the exact money taken from the pension levy is used to pay for the private sector but it contributes to government revenue and and this in turn forms the basis of expenditure!

Basically my point is - is it fair to tax the public sector for pensions, while simultaneously providing tax breaks and contributions to private sector pensions?

[chippie]

O'Toole is a twat. I try and put as much into my private sector pension as I can, so I won't be a drain on the state in later life. My company contribute very little so the 41% tax relief makes a big difference. Given that its a defined contribution scheme I have lost most of that benefit anyway. Pensions are the one thing I don't think that should be touched, people need the incentive not to rely on the state in the future.

[peadarmc]

O'Toole is a twat. I try and put as much into my private sector pension as I can, so I won't be a drain on the state in later life. My company contribute very little so the 41% tax relief makes a big difference. Given that its a defined contribution scheme I have lost most of that benefit anyway. Pensions are the one thing I don't think that should be touched, people need the incentive not to rely on the state in the future.

Yea but can you understand why the public sector are raging about the pension levy and claiming its unfair?

[He3]

afaik the State does not make any payment to private pensions, contrary to the impression FOT might create. The State lets people put some of their earnings into pension funds and it foregoes the tax it would take from them then, but it comes back and taxes them when they start drawing an income from the fund. There is a bit that they can take tax free but I don't think that is what Fintan is on about.

Nett effect is they get the tax when the person gets the income in the way of pension, and they are prepared to wait for it until then, as that way, the person feels they have a good reason to put money aside for their retirement. They feel they are getting a tax break, but it is more like a tax deferral matching the deferral of use of the money they put into the fund which they can't touch til they retire.

Probably missing something in translation there, but that is how it seems to me.

[Furze]

---------Meanwhile the Government spend 2-3Billion every year on private pension supplementation! ----------------

And from borrowed money. Kept the ISEQ ponzi scheme going.

Good Primetime though.
Dempsey still not greying - amazing.

[Tressell]

OOh! I can hear lots of 'phone calls to P.S. Unions, now that Cowen wants ICTU to talk again. Public v Private-Round 2. Thanks Fintan.

[Mar Tweedy]

afaik the State does not make any payment to private pensions, contrary to the impression FOT might create. The State lets people put some of their earnings into pension funds and it foregoes the tax it would take from them then, but it comes back and taxes them when they start drawing an income from the fund. There is a bit that they can take tax free but I don't think that is what Fintan is on about.

Nett effect is they get the tax when the person gets the income in the way of pension, and they are prepared to wait for it until then, as that way, the person feels they have a good reason to put money aside for their retirement. They feel they are getting a tax break, but it is more like a tax deferral matching the deferral of use of the money they put into the fund which they can't touch til they retire.

Probably missing something in translation there, but that is how it seems to me.

The State doesn't make direct contribution but allowing for private pension contribution at the higher rate (with a high threshold of contribution afaik) is in effect subsidising private pensions.

A point which was not highlighted at all during the public service pension levy hysteria, funny that.

I doubt they'll risk making much of a change to the status quo for fear of upsetting the insurance companies whose representatives will no doubt be making a bee-line to government buildings in the morning.

[PhoenixIreland]

How many circle jerks are you guys gonna have on this private sector victim complex?
This must be the 200th thread