Friday 26 December 2014

Cash donated for sick children will pay CRC boss's €4m pension

Published 12/12/2013 | 02:30

CRC chairman David Martin, current interim chief executive Jim Nugent and former CRC chief executive Paul Kiely following a Public Accounts Committee meeting
CRC chairman David Martin, current interim chief executive Jim Nugent and former CRC chief executive Paul Kiely following a Public Accounts Committee meeting

MONEY that was donated to help disabled children will part-fund the €4m gold-plated pension pot of the former Central Remedial Clinic chief executive Paul Kiely.

His lavish personal retirement package will provide him with an annual pension of nearly €100,000, plus a €200,000 tax-free lump sum.

The €4m figure is based on two independent actuarial calculations.

Mr Kiely once described the CRC as "skinflints" but his retirement fund is similar to that of High Court judges, former cabinet members and Taoisigh.

In a fraught Public Accounts Committee hearing, Mr Kiely confirmed that he is among 70 staff whose pensions are being propped up by fundraising arm, the Friends and Supporters of the Central Remedial Clinic.

The Friends and Supporters is funded from lottery ticket sales and brings in around €1.5m a year. But it pays top-ups of up to €37,000 each to five members of staff.

In a day of shocking revelations, it emerged that the CRC is being forced to use HSE funds directly earmarked for disability to make an annual payment of €666,000 to the Mater Hospital to support a separate pension fund.

An extraordinary series of disclosures emerged, including:

* Mr Kiely will get a pension based on his boosted salary, which included a state wage of more than €100,000 and a charity-funded top-up in excess of €116,000.

* The board of the CRC reneged on an agreement it made with the HSE four years ago when it paid a top-up of more than €40,000 to bring the salary of its chief executive Brian Conlan up to €125,000 in July.

* The CRC must pay the Mater Hospital €660,000 annually from the money it receives from the HSE to look after sick children even though the purpose of the payment is now outdated.

* The CRC poured nearly €500,000 into a limited company supplying equipment for the disabled which it may never fully recover -- even though the company had to be sold.

Today the HSE is to meet the chairmen and a board member of all voluntary agencies and hospitals which are in receipt of HSE funding.

The HSE will issue them with an annual compliance statement in which they will be required to state that they comply with their statutory obligations in relation to pay, tax, finance, systems of internal control and governance.

These hospitals and agencies will be given until the end of the year to comply, and the statement will form part of their service-level agreements with the HSE this year and every year after that. 

The bodies that are not compliant with public pay policy will have to make a business case for doing do.

During yesterday's PAC hearing, the members of the CRC board were repeatedly asked to resign by members of the committee.

The HSE was berated for failure to monitor and police the agency after being told in 2009 that salary top-ups would have to come from its charity funds.

Independent TD and PAC member Shane Ross, who led a six-hour grilling, said the actions of the board members of the CRC were "a disgrace".

Speaking to the Irish Independent, he said he had no confidence in the board and called for them to resign immediately.

"Their actions are indefensible. What came out at the committee was truly shocking, particularly in relation to the €666,000 payment to the Mater Hospital," he said.

The Mater insisted that in return it had taken on the liability for the pensions of nearly 200 CRC staff.

Mr Ross also asked why so many directors of the board had connections with Bertie Ahern -- acting CEO Jim Nugent gave the former Taoiseach a "dig-out" while Mr Kiely was a close friend. Mr Nugent said he was asked to be a director by the late Lady Valerie Goulding.

Meanwhile, Mr Kiely, who confirmed he had resigned from the CRC board since the scandal erupted, claimed his attempts to end the outdated payments to the Mater were shot down.

MINEFIELD

"I always questioned it," he said, adding he was told it was a legal agreement dating back some 30 years.

Mr Nugent also defended the actions of the board, saying it was an independent organisation and contractually bound to pay salary top-ups to staff.

But Mr Nugent, who is also the chairman, admitted that they did not approach staff who got top-ups to ask them to voluntarily give them up. "They had employment contracts that we couldn't break, without being sued, I guess," he said.

David Martin, a director of the board, insisted that as a private company the CRC made its own decisions on salaries.

"This is a legal minefield for us in this respect," he said.

Mr Kiely, who returned from abroad for the committee meeting and will not draw the pension for another three years, was asked if he would pay any of the top-ups back. He said he would consider it.

Asked if he had any qualms about taking the money from charitable funds, he said: "Have I qualms? I have qualms about everything to do with this, absolutely everything."

But Mr Kiely currently stands to receive a multi-million euro pension to rival those paid to former Fianna Fail ministers.

Based on his testimony to the PAC, Mr Kiely's "private pension" could be worth up to €4m over its lifetime, according to two independent actuarial calculations.

Mr Kiely's expected pension is similar in scale to the pension pots of almost €5m for former Taoisigh Brian Cowen and Bertie Ahern, and the pension pots of up to €4.2m being paid out to other cabinet ministers.

It is understood he is due an annual pension of €100,000 a year. Mr Kiely also said his pension was index linked to up to 5pc.

Based on what he said, at the PAC, Mr Kiely's pension pot is worth at least €3.1m -- but given he said he was entitled to the maximum limit of benefits allowed by Revenue, it has been estimated the value of his pension pot could be closer to €4m.

Eilish O'Regan and Daniel McConnell

Irish Independent

Promoted articles

Read More

Promoted articles

Editor's Choice

Also in Irish News