Order the headstone now "Here lies Private Pensions, murdered by a bunch of clowns in an act of stupidity after a long struggle with markets RIP."  The programme for government proposes to reduce the incentive to avoid retirement poverty by saving in private pensions (AVCs, PRSAs and Personal Pensions).  The move will affect huge numbers of self employed workers, those not in company funded retirement schemes and contract workers.  The proposal is that you'll no longer get tax relief equivalent to the top rate you pay, instead you'll get hammered by income tax and levies at over 50% on your earnings (and your pension) but you'll only get 30% relief on any money you manage to save.

Even a child in a creche could work out that this is a very dodgy deal. But we're not talking about toddlers, we're talking about politicans who'd prefer to screw the disorganised and vulnerable backbone of the economy rather than introduce real reform. These chuckleheads think that by setting relief at 30% it will enourage low paid workers on standard rate tax to save even though they don't have the money! But its really a smokescreen to duck the real issue, the reform of public sector pensions. Already, in a previous act of cowardice they've hit anyone with taking more than €200k out as a tax free cash lump sum with tax. But guess what, that doesn't affect any public sector worker retiring on less than €133,000 taking up to €200,000 tax free and gettting a pension ecaslating with salary grade increases beginning at €66,000 and worth over €2 million in the private sector.

But the private sector worker is screwed with the tax on any part of his pot worth over €800,000, that means the tax comes in at a level 60% lower than fellow workers in the Public Sector. But what makes it all the more galling and reinforces the wall around the pensions ghetto is that all private sector workers already pay for pensions through tax transfers except they don't get a stitch from these pensions because they're paid to public sector workers. The real issue isn't the tax relief forgone by the Revenue to encourage private sector workers to save to avoid retirement poverty but the huge black hole from public sector pensions now topping €100 billion in future liabilities. To hammer one without first reforming the other is an extraordinary exercise in cowardice and self interest.

Leinster house with its own nose in the public sector pension pot and cowering before omnipotent public sector unions, can be relied upon to continue to shaft the private sector rather instigate real reform. This would require topping public sector pensions at about forty grand and introducing a universal pension into which all workers contribute capped at a modest level and supported by pension guarantees. Fat chance from the fatcats.