The Finance (No.2) Act 2011 was signed into law on 22 June 2011 and introduces a pensions levy which was announced in the Government's Jobs Initiative earlier this year. This levy of 0.6% applies to Revenue approved private pension funds and is expected to raise approximately €470 million each year, or a total of €1.88 billion during the course of the 4 year period (2011-2014) for which it is introduced. The levy is applicable to the aggregate market value of the assets of each pension scheme at 30 June each year. It will be administered by the Revenue Commissioners and is payable in one instalment before 25 September each year. The Act provides for a penalty of €380 per day to be imposed in circumstances where the payment of the levy is delayed.
The Implementation Group of the National Pensions Framework recently published its much-anticipated consultation paper detailing possible amendments to the Funding Standard for defined benefit pension schemes. The two main proposals outlined in the consultation paper would, if implemented, result in an increase in a pension scheme’s statutory liabilities (at least for future service benefits) and potentially would make the funding regime for defined benefit arrangements more onerous and complex for both trustees and employers. The implementation of any of the proposals, could have serious implications for defined benefit schemes and closure or significant restructuring may be on the cards for many, if not most, schemes. While the timeframe for the introduction of a new funding standard is still somewhat uncertain, an announcement on the issue is expected shortly.