Perks for AIB staff halted on sport clubs and loan rates
AIB IS to stop paying club membership fees for staff and will no longer offer favourable lending terms to new employees, it was revealed last night.
In an email to staff seen by the Irish Independent, the lender's head of human resources, John Conway, said the changes came as part of a review of the remuneration and benefit structures due to the ongoing problems within the bank. The cuts came into effect at the start of this month.
"We [have] decided to discontinue the provision of club subscriptions and the staff assurance payment to new entrants and staff retiring from the bank.
"In addition, we will no longer provide preferential borrowing rates to new entrants," wrote Conway.
The cut in benefits had become necessary "given our ongoing serious cost issues and our reliance on substantial state support," he added.
Due to the terms of employee contracts, the bank is not removing the lending benefits for current staff, but it is believed there will be further reductions in perks, if it is legally possible.
The bank also told employees that it has agreed with the IBOA what the terms of reference would be for an independent tribunal to deal with what Conway called "outstanding matters between us, including the terms of our severance programme".
"The arrangements for the tribunal will be agreed as quickly as possible," he said.
AIB announced plans to cut some 2,000 staff last April but there has still been no word on how this will be achieved. IBOA chief Larry Broderick strongly criticised the bank last month, implying the decision had been taken with "no consideration" as to how that would be achieved or the potential impact on frontline services.
The decision to end paying membership fees and special lending rates for staff removes two benefits in kind that had been key attractions for potential employees of the bank.
The preferential rates are essentially redundant at the moment, given the low regular interest rates but were historically seen as a great benefit of working at AIB and other financial institutions.
The same went for club membership, which has been a significant perk for staff for years.
Up to now, AIB covered 50pc of club membership fees up to €1,250 for the rank and file, and 100pc of subs up to €2,500 for management.
Bank of Ireland still covers the cost of sports club membership for staff, capped at a fixed amount depending on seniority. The cuts, while inevitable given the position of AIB, will be another blow to morale at the bank.
Earlier this week it emerged that it would not give further details on job losses until 2012 -- almost a year after the original announcement.
AIB closed down 8.14pc at 8c.