Judges threaten mass walkout over new pension tax laws

The Government is facing a mass resignation of High Court judges if it fails to implement a bill aimed at exempting them from changes to new laws on pension rights.

It is understood that a handful of judges have already drafted their resignation letters, fearful that backbenchers will blackball the Judicial Pensions Bill because it appears to be giving judges special treatment.

“For some judges it would be financially crippling. If the judges can’t get out of it, I don’t think they will have any alternative but to resign,” said one source.

A spokesperson for the Department for Constitutional Affairs said that the bill was the preferred route of the Lord Chancellor, but admitted they were studying alternative options should it fail.

In April 2006, the Government is introducing a £1.5m cap on the amount of tax-free money allowed in a pension fund.

There was uproar among judges and other senior civil servants, who moved out of the private sector, hence taking a huge pay cut, but accepting the benefit of a non-contributory pension.

“It’s part of the package that makes it attractive to be a judge. We’re talking about top QCs who can earn in excess of £1.5m a year at the bar,” said another source.

The Government proposed a compromise, offering judges and other senior public officials protection against the pension cap through Unfunded Retirement Benefit Schemes.

The new pension rules come into effect on 6 April 2006, known as A-Day. If the amendment is not voted through, judges will face a huge tax bill despite never having had the money or the tax relief because their pensions are non-contributory.

“Irish judges are seething because many took personal risks judging on cases involving the IRA, and now they’re going to be hit with this massive tax bill,” said a source.