Ex-AIB chief on course for pension of €300,000 a year
Published 20/04/2011 | 05:00
FORMER AIB boss Colm Doherty is on course to receive an annual pension of €303,000 a year when he hits 65, it has been learned.
The bank boss, at the centre of a storm over his €3m total pay package for last year, was a long-time member of the defined benefit pension scheme in the bank.
Strict legal rules around pensions mean that any attempt to claw back his pension pot would be highly unlikely to succeed.
Large contributions have been made into the pensions scheme over the past few years on his behalf.
In 2009, a total of €145,000 was paid into the pension fund on Mr Doherty's behalf. The previous year a sum of €141,000 was paid into the fund.
The latest annual report for the bank shows that Mr Doherty is entitled to €303,000 a year in pension payments when he hits 65.
Pension experts said last night it was almost impossible to take away a person's pension entitlements as they are protected by trust law.
The bank's former managing director's pay last year was made up of a salary for January to November of €432,000.
In place of a year's notice, Mr Doherty was also paid €707,000 when his contract was terminated at the direction of the former Finance Minister Brian Lenihan.
He was also paid about €2m instead of a contribution to his pension.
Pensions experts said the bank was unable to pay any more money into the AIB pension fund on behalf of Mr Doherty, as the notional value of his pension pot exceeded a cap of €5.4m put in place in 2005.
This means he got €2m in cash instead.
Income tax at the marginal rate, which is currently 53pc, would have to be paid on the €2m.
The Department of Finance said yesterday it did not sign off on the €2m payment, but the package was what Mr Doherty was legally entitled to, under the terms of his contract.
His appointment to the position of managing director in 2009 was controversial, as it went against the former government's commitment to changes at senior executive level at the banks.
Mr Doherty had been on the board of the bank since 2003, and a director at a time when the bank made bad lending decisions.