Madam, – I noted Patrick Burke’s concern for the welfare of 800,000 workers when he stressed the importance of the current level of tax relief in his article (Opinion, April 2nd). However, I would be more interested in hearing his opinion on the complete negligence and disregard shown by the pension industry for the welfare and financial health of pension contributors over the past number of years.
They stood idly by while the banks destroyed shareholder wealth with their irresponsible lending policies. With the share holdings the pension industry controlled, they had the ability to exercise proper oversight over the banks and their boards, yet they made no attempt to cry halt to the madness.
Of course it would be no coincidence that the growth in share price that was the initial result of our property bubble led to increased notional profits for the funds they managed with subsequent generous bonus payments for those in the pension industry.
It is important that those entrusted with our money invest it with more diligence and hold those with whom they invest it to account for their actions. Indeed I seem to recall over the years that when ordinary people attempted to gain election to the boards of financial institutions, the votes held by pension funds were used against them. – Yours, etc,
Madam, – Your recent series of opinion pieces on various aspects of the economic crisis have been informative and at times provocative. Your decision to supply brief biographical details on contributors greatly assists the reader in determining whether the author has a vested interest in the subject.
As the official voice of the pension industry, Patrick Burke made a reasonable attempt to keep his members’ gravy train firmly on the tracks. It should be patently clear that any attempt at scaling back pension relief would hit Mr Burke and his industry brethren first.
He suggests that a tax on investment returns would yield a paltry €1 billion. Even after the recent turmoil, private pension assets are still worth in the order of €60 billion. This tax represents a little more than 1.5 per cent of the pension funds, a figure comparable to the commission levels earned by the industry in any given year.
His piece in no way addresses the anomalous situation whereby “higher earners” obtain a significantly greater benefit from their pension contributions than those taxed at the standard rate or indeed the 800,000 workers who fall outside the tax net.
Mr Burke makes a dubious point on the taxation of pensions income. The fact is that the vast majority of retirees pay tax at the standard rate or are exempt from income tax, although they have enjoyed tax relief at the higher rate and tax free growth in their funds.
He rails against the introduction of a tax on lump sums. Many members of private pension plans find they are already levied with a significant exit penalty upon retirement.This penalty is courtesy of the pensions industry, lining up for one last grab, through the spread on cashing out of the funds. – Yours, etc,