The Irish SME Association (ISME) has started a campaign to raise funds for a legal initiative to create an equitable system for private sector pension savers.
ISME hopes to raise €500,000 to support three plaintiffs who will challenge tax discrimination against private sector workers before the High Court.
The funds raised will support the creation of a technical team giving assistance and expertise and advice for the pension’s equity challenge.
The last Public Service Pay Commission report found that while there is almost 100 per cent pension coverage in the public sector, the overall figure for the private sector is just 40 per cent, ISME has said.
Workers in the private sector who aspire to a pension even close to that enjoyed by a public sector worker earning the same salary, would have to surrender more than a third of their salary.
The association says that even if they could afford it, taxation rules constrain them from doing so, as it permits only third division pensions for private sector workers.
There are plans to initiate proceedings in the High Court this year and ISME has called on PAYE workers, professional groups, trade associations, trade unions and SME owners in Galway to support the campaign.
They are calling for private donations of €100, or whatever donors can afford, to support the challenge.
As the biggest beneficiaries of this challenge, it is calling on pension providers to donate a minimum of €10,000 each.
“Private sector workers are not treated in a fair or balanced way when they try to save for a pension,” said Neil Mc Donnell, CEO of ISME.
“As far as is possible, private sector workers and SME owners should enjoy parity with public sector workers in our pensions system.
“We are calling on private sector workers to support this campaign. Every private sector pension saver will benefit from a successful court challenge and we are asking for funding support so this can be achieved.”
Neil Mc Donnell says it is ironic that those in the public service who declare tax relief on private pensions to be ‘tax expenditures’ are themselves the beneficiaries of an enormous transfer of wealth from private sector workers to the public sector.
“Tax relief on private sector pensions savings is tax deferred, not tax avoided. With the support of the SME community, we have a great opportunity to fix this and to ensure a fair pension system on behalf of private sector workers,” he added.
For further information and to support the Pensions Equity Challenge, visit the GoFundMe page here: https://www.gofundme.com/f/pensions-equity-challenge