Retired public sector workers who take up the roles of "public interest directors" on the country's bank boards do not take a cut on their pensions, the Irish Independent has learned.
The so-called "pension abatement" rules mean most retired public sector workers who return to work in state-funded jobs have to sacrifice a share of their pension.
But these rules do not apply in the case of "public interest" bank directors sitting on boards of state-owned or partially state-owned banks, according to Michael Noonan.
"The abatement rules could not be applied to these fees as the institutions involved are not within the public service," he said.
It comes after new figures showed that 12 directors put on the boards of failed banks to represent taxpayers have shared €2m in fees over the past three years.
They include four former cabinet ministers, Alan Dukes, Ray MacSharry, Dick Spring and Joe Walsh, as well as four former heads of government departments, who are each understood to be eligible for public sector pensions based on their earlier careers.
Of the 12 public interest directors, Mr Dukes has earned the highest amount of fees since 2008, at €379,000. But this year he volunteered to take €100,000 less.
At AIB, former Tanaiste and leader of the Labour Party Mr Spring has been paid €132,000 in fees since 2009.
Former agriculture minister Mr Walsh has been paid €238,000 as a director of Bank of Ireland.
The public interest directors were appointed to the boards of all the main banks after the lenders received €64bn in state rescue funds following the banking crisis in 2008.
The directors are to be called before the Oireachtas Finance Committee to give an account of their role on the bank boards, after it emerged in recent weeks that they had no reporting line to the Finance Minister or any other state body.
To guarantee their independence, public interest directors do not have to stand for regular re-election to their boards, but under company law they have the same responsibility to companies as any other board member, raising questions of their value as watchdogs for the State.