FORMER AIB chief executive Eugene Sheehy’s reported €500,000-a-year pension would cost €10.5m to fund his entire retirement, Finance Minister Michael Noonan admits.
It comes after public uproar about Mr Sheehy and other former bankers’ pension pots, after it was reported he was getting €529,000 a year.
Mr Noonan was asked in the Dail by Sinn Fein’s Pearse Doherty if he would “estimate the capital value needed by a pension fund in order to |make an annual payment of €529,000 to a scheme member, as is reportedly the case with annual payments to the former chief executive officer of AIB, Mr Eugene Sheehy”.
Mr Noonan replied: “AIB informs me that for an employee retiring at age 60 with 40 years pensionable service and an annual pension of €529,000, AIB estimates that the capital value accummulated in a fund to provide this annual figure would be approximately €10.5m.”
Earlier this month, AIB’s chief executive, David Duffy, confirmed that some of the €1bn of assets transferred from its balance sheet to its pension fund is helping to pay the “super-pensions” of former senior managers.
The novel scheme to rescue the pension fund was designed to help slim down the bank by funding an early- retirement scheme.
However, it has now emerged the transfer is also helping to pay the huge pensions of executives who left the bank years ago, including those in charge during the banking crisis.
Last week, former AIB chief executive Mr Sheehy bowed to public pressure and took a major cut to his pension.
Taoiseach Enda Kenny added to the pressure by saying AIB's former managers had a “moral responsibility” to reduce their retirement payments.
AIB's current chief David Duffy is also writing to former executives, asking them to give up some of their huge pension entitlements.