IRELAND - The Irish government was warned about the impact of its pensions levy on schemes with illiquid investment strategies, minutes from an Office of Revenue Commissioners meeting have revealed.
Minutes from a Taxation Administration Liaison Committee (TALC) meeting show that concerns were raised about pension funds' ability to make the 0.6% levy payments following the enactment of the Finance (No. 2) Bill earlier this year, as well as whether administrators would be liable to make the payments.
The sitting government introduced the levy in May in an effort to raise €470m a year for an employment stimulus package and fund a number of construction projects.
But critics have warned of its damaging impact, with an Irish trade union suggesting schemes should be forced to invest a minimum amount in local infrastructure projects.
The minutes from a meeting earlier this summer noted that participants were set to provide Revenue with more detailed information on the risk of overburdening pension administrators with the levy.
"Practitioners noted that, in the case of illiquid investments, there may be no cash in the fund and thus no resources to pay the pension levy," the minutes added, noting that alternatives for paying levy charges were discussed without naming them.
The minutes also indicated that a meeting was scheduled to take place between the minister for finance and the pensions industry to discuss the levy.
A debate in the Dáil previously revealed that minister for finance Michael Noonan failed to consult with Ireland's Pensions Board prior to the implementation of the levy.