Watchdog to probe 'special' pension deals in semi-states
AN investigation has been launched into how the Government breached its own guidelines on giving lucrative 'sweetheart' deals to four sacked semi-state chiefs.
The Irish Independent has learned the Cabinet gave the go-ahead for special termination packages for the four CEOs, despite them not meeting criteria laid down.
They were among 86 pension top-up and severance deals approved under the past three Finance Ministers, including Brian Cowen.
Among those who benefited from the other 'golden handshakes' were advisers to former Taoiseach Bertie Ahern, as well as disgraced former FAS chief Rody Molloy.
However, the packages to the four CEOs are specifically being probed because the Government sought to give them the go-ahead even when they knew the guidelines had not been met.
The Public Accounts Committee is to probe these four deals. PAC Chairman and Fine Gael TD Bernard Allen said: "This is very disturbing and it shows that different rules were set aside for the top brass."
The revelations come as it emerged the former head of the Department of Finance, David Doyle, received a pension top-up to increase his annual pension to an estimated €115,000.
The unidentified chief executives given the special deals had their contracts terminated, or not renewed, to allow for a "fresh" approach in their respective companies. This made them eligible for a special CEO severance and pension arrangement.
But the four executives didn't qualify for these conditions.
In one case, a CEO is believed to have been the wrong age and others were seeking additional pension years that exceeded a five-year cap.
Documents obtained under the Freedom of Information Act show the Government decided to approve the four special packages between 2000 and 2007.
The cases were among a raft of pension top-ups and special deals approved since 2000:
- Thirty-three pension deals worth €589,840 under Brian Cowen.
- Thirty-three deals worth €589,754 under Charlie McCreevy.
- Twenty-two deals worth €1,090,759 under current Finance Minister Brian Lenihan.
The four controversial approvals now being probed by the PAC came during the period when Mr Cowen and Mr McCreevy were the Finance Ministers.
Guidelines for the special scheme for semi-state CEOs were circulated by the Department of Finance in 1998.
They allowed for one year of pensionable service to be added onto their pension package for each year they worked in the public service after the first 15 years.
However, the guidelines cautioned that this pension top-up had to be capped at five years.
The severance arrangement also entitled CEOs to a severance payment of four weeks of pay for up to a maximum of 26 weeks.
To qualify for its terms, chief executives must have headed the semi-state body for six years, and have worked for 15 years overall in the public service.
If the conditions were not met, the board of the semi-state body had to get the package cleared by government.
It is understood the exemptions would have been run past the Finance Minister, before going to Cabinet for approval.
The most recent decision came on January 31, 2007 during Mr Cowen's tenure as Finance Minister, when a CEO fell short of the age criteria.
The three other cases occurred during Mr McCreevy's tenure as Finance Minister.
In June 2003, the government allowed a CEO to get 6.66 additional years of service to his pension package, while another CEO got six months' pay in November 2001.
On March 2000, the government gave the go-ahead for 5.5 additional years of service to be added on to the third CEO's pension package.
The Department of Finance said the deals were approved by government. But last night Mr Allen, demanded clarification on why the exemptions were granted.
"We will be seeking an explanation from the Department of Finance," he said.
"On first sight it seems that ministers were playing hard and fast with taxpayer's money and providing extraordinary golden handshakes to semi-state CEOs."