Friday 22 September 2017

Hundreds of bank staff in line for average redundancy of €120,000

Charlie Weston Personal Finance Editor

THREE hundred staff at Permanent TSB who are taking up a redundancy offer are set to get average payouts of €120,000, it has been learnt.

The soon-to-be-nationalised bank received applications from 1,000 people for the packages, but just 300 have been accepted.

Some managers are understood to be walking away with deals of up to €400,000, the Irish Independent has learnt.

The bank has put aside €38m to finance the generous redundancy deal. It had initially sought 280 lay-offs but increased the figure due to strong demand.

Workers at the bank who have been accepted for the scheme have their payouts capped at 2.75 times salary.

This means that someone on €50,000 will receive a redundancy payment of €137,500. A portion of this will be tax-free, with the amount varying for each worker.

The deal is slightly higher than redundancy deals offered by other banks.

Loss-making Permanent TSB maintained last night the scheme would generate savings within two years.

Staff were informed about the details of the redundancy deal yesterday.

A spokesman for the bank denied that some managers were walking away with €500,000 payoffs. And he said there was no agreement to hand over staff cars free to departing staff.

However, the spokesman conceded that a manager on €150,000 would end up with more than €400,000. He insisted that fewer than half a dozen managers had been accepted for the offer.

Exorbitant

"The average is less than €120,000. The suggestion of exorbitant payoffs is misleading. There are no payments of half a million euro," he added.

A spokesman for the Department of Finance had no comment.

Earlier this month, Finance Minister Michael Noonan shot down AIB's plans to give laid-off workers redundancy packages that could range from €50,000 to €300,000.

AIB, which is majority-owned by the State, has been forced to submit "revised" proposals.

The original plans were believed to have included "industry norm" payments of six weeks' salary per year of service plus an extra two weeks' statutory payments for every year worked.

The state-owned bank is also believed to have asked for permission to cap the payments at between two and 2.75 years' salary. Based on that package, a bank worker on a €50,000 salary entitled to the maximum payout could walk away with €137,500.

Irish Life & Permanent (IL&P), which owns Permanent TSB, is privately owned.

Under the Government's plans for the banking sector, IL&P will have disposed of or floated its life assurance business by this time next year.

The remaining banking business, Permanent TSB, will have received a dollop of taxpayers' money -- about €4bn -- and will in effect be nationalised if it has not been merged or sold.

Most of this funding will probably have to come from the State, which would mean the bank was nationalised.

Last week, Mr Noonan secured a court order directing IL&P to take steps to achieve the speedy and orderly sale of Irish Life as part of efforts to recapitalise the company by €4bn.

The order safeguards the company's plans to sell Irish Life, which is estimated to raise €1.5bn toward the recapitalisation.

Dave Guinane, chief executive of the lender, said earlier this year the bank would seek the redundancies as part of a plan to "secure the future" of the company.

"We have set out a road map for the recovery of the bank, and while that impacts on both customers and staff, it is key to the ultimate recovery and success of the bank," he said.

Euro crisis latest: pages 32-33

Irish Independent

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