An Coillte and several other semi-State agencies facing massive losses on staff pension schemes sought cover by nationalising their pensions. No this didn’t remove their black holes, merely shifted them to taxpayers to add to the liabilities we still carry and which now run at €130 billion. The way tax transfers operate, most of this burden is carried from taxing the private sector. The biggest winners ,by far, in this grossly lopsided and broken model are Ministers past and present and their mandarins  whose pension pots are variously worth between €2 million and €5 million each.

That other semi-State companies like the ESB and RTE limped on but, since Tuesday, now face paying out millions from workers pensions to the Government despite already carrying massive deficits while others successfully ran to  State cover, tells you all you need to know about the stomach turning inequity of this fiasco.

In the calculation of the public sector elite, because a physical pot of assets do not support their liabilities, well, they simply don’t exist see. Its magic money. That explains the warped ideology and crass self interest behind Theft Tuesday last when the same people orchestrated a raid of 2.4% of all the accumulated savings of 800,000 workers in the private sector whose pension pots are worth a tiny fraction of theirs. Tens of thousands of short service public sector workers are also to face depletion of their pensions after struggling to save in AVCs, and that especially includes national school teachers. Many cynical things will make you throw up during this crisis but none so much as this asset grab by the State.

Uninformed thus far, much of the media commentary has been focused on what the Government intends to do with the money and very little on whether it will succeed in getting it. Despite making the announcement the Government has no legislative framework in place to give legal strength to it nor has it begun to figure out how to thieve 0.6% per year of all the assets in private pensions.

The Government may seek to make pension administrators liable for the levy. But these don’t own the assets. That raises the first fundamental flaw in its planned raid -how you can ask a third party to take money from workers funds without their permission? But the group in the most trenchant position are the trustees, the guardians of workers assets and who are specifically mandated to protect them under longstanding and complex legal rules. Just how the Government expects to defeat them by setting aside trustee law to snaffle scheme assets is unknown at this point but perhaps the Law Society pension scheme trustees may have a view.

The other hurdle the Government faces is affordability and liquidity. Many large worker schemes are bordering insolvency, carrying huge deficits while others simply have no cash, having committed funds to properties or locked them into illiquid financial instruments like tracker bonds.

Saying you’ll collect €470 million a year is the easy bit. Politicians love making speeches about  spending other peoples money but, collecting this from appropriating assets in the face of insolvency, illiquidity and likely robust legal challenges is entirely new ground for any Government in the history of the State.

Next week the Department for Finance expects to begin discussions on procedures with industry chiefs including large scheme trustees representing both semi state companies and US multi-nationals. Instead it will face, at best, a doctrine of non-cooperation and at worse open hostility and challenges with threats of job losses among administrators stuck with the bill. Don’t be surprised to hear rumblings about u-turns in the very near future as aghast Department of Finance officials come face to face with the  mess into which their political masters have landed them.

- Eddie Hobbs