Pensions of retired bankers to be cut by up to 40pc in Fianna Fail plans
RETIRED bankers who worked for bailed out lenders could face cuts of as much as 40pc in their pensions, under new legislation proposed by Fianna Fail.
The pension reduction would be based on cuts already imposed on some sections of the public sector, and the law would not fall foul of constitutional protections, Fianna Fail finance spokesman Michael McGrath TD said.
Under the plan anyone whose pension is between €100,000 and €150,000 a year will be hit with a 20pc reduction.
Pensions of €150,000 to €200,000 will be reduced by 30pc and the biggest pensions of in excess of €400,000 would be cut by 40pc, or €160,000 a year, under the plan.
The proposed new law will apply to pensions of the retired staff of AIB, Bank of Ireland, the former Anglo Irish Bank and Irish Nationwide Building Society as well as EBS and Permanent TSB.
The six banks are known as the covered banks since their tax payer funded bailouts.
"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 €1.1bn 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.