independent

Friday 25 April 2014

Retired bankers face pensions cut

Finance spokesman Michael McGrath said the Government has no reason to reject the Bill, which he described as deliverable and achievable

Retired bankers with massive pensions of more than 100,000 euros could see their payments slashed by up to 40% under proposed changes to the law.

New legislation published by Fianna Fail calls for retired executives of state-guaranteed banks to take the hit to restore public confidence in the tarnished institutions.

Finance spokesman Michael McGrath said the Government has no reason to reject the Bill, which he described as deliverable and achievable.

"The Oireachtas has a duty to respond to the justifiable public anger surrounding the extraordinary pensions paid to some of the country's most senior retired banking executives," said Mr McGrath.

He said the issue came to a head at a recent Finance Committee meeting when Allied Irish Banks (AIB) revealed its defined benefit pension scheme - which had benefited from a 1.1 billion euro bailout - was the same that pays pensions to the bank's retired top brass.

The Bill is a proposed amendment to the existing Credit Institutions (Stabilisation) Act 2010, which in itself provided for amendments to the bank guarantee scheme introduced in 2008.

The proposed amendment will allow for bankers - from banks covered by the existing legislation - on pensions from 100,000 to 150,000 euro have them cut by 20%.

Payments between 150,000 and 200,000 euro would be reduced by 30%. And any amount over 200,000 euro slashed by 40%.

Mr McGrath said the proposed cuts would be imposed on top of the public service pension reduction scheme, introduced earlier this year.

It saw the minimum public servant pension age hiked to 66 years and imposed a maximum retirement age of 70. Career average earnings would be used to calculate the pension - as opposed to final salary.

Press Association

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