Bank staff to benefit from €38m in pay-offs
'Golden goodbyes' for 500 at PTSB
MORE than 500 staff at Government-guaranteed Permanent TSB are to get a bonanza pay-off as part of a special redundancy scheme, which will provide more than seven weeks' pay for each year they have been with the company.
The bonanza package at the State-rescued bank is also available to the 245 Irish Nationwide Building Society staff who earlier this year transferred into Permanent TSB as part of a forced merger of Nationwide with the Anglo Irish zombie bank.
Four-out-of-five of the new Nationwide arrivals have signed up for the voluntary severance package deal.
The €38m package will see staff walk away with an average pay-off of €120,000 -- but some managers will be in line for pay-offs of more than €300,000.
The deal at the crippled bank, which only exists because of a State guarantee, provides payouts of up to 2.75 annual earnings based on 7.25 weeks' compensation, which includes the basic statutory right to two weeks' redundancy compensation.
These 'golden goodbyes' contrast with construction workers and many in the hospitality sector who only received the basic legal entitlements when they lost their jobs over the past two years.
The bank is being rescued by the taxpayers and needs to raise €4bn to remain in business, some of which it hopes to raise by selling the profitable Irish Life arm.
Many of the bank's employees are keen to leave, knowing that the Irish Permanent and the TSB separate pension schemes are both in difficulty. At the beginning of this year, they had a shortfall of nearly €120m.
The voluntary redundancy package was negotiated by the Irish Bank Officials' Association. The bankers' union strongly advised its members to effectively grab the deal due to uncertainty over the bank's future funding and continuing Government support for the institution.
Three months ago, the bank was ordered by the Central Bank to raise €4bn following stress tests. About €1.5bn is expected to be raised from the Irish Life sell-off.
Last Thursday, Finance Minister Michael Noonan said that he would prefer that the Irish Life arm be sold to another financial company rather than floated on the stock market."We are within weeks of being able to announce that we are going to the market to sell the insurance side," Mr Noonan added.
He has warned IL&P that the proceeds from the life assurance and pensions arm sale cannot be used to plug the €120m gap in the pension funds. The money has to be used to meet the Central Bank requirement to strengthen its capital adequacy.