Lenihan to face grilling on banker's pension top-up
Published 19/04/2010 | 05:00
FINANCE Minister Brian Lenihan will be grilled on why he cannot intervene and stop the massive €1.5m pension top-up to one of the country's leading bankers.
When the Dail resumes tomorrow after the Easter break, opposition parties have pledged to ramp up the pressure on Mr Lenihan to state what he knew about the controversial payment given to Bank of Ireland chief executive Richie Boucher.
Labour leader Eamon Gilmore insisted: "The minister does have the power to intervene and he should intervene."
Bank of Ireland pumped €1.5m into the pension pot of Mr Boucher, who has an option to retire in four years' time at the age of 55 with an annual pension of €367,570.
The Government is now under mounting pressure to justify the payment amid accusations it had undermined the €500,000 salary cap imposed on bank chiefs last year.
But Mr Lenihan is insisting he cannot intervene and there is nothing he can do. "It is not a payment to Mr Boucher directly, but it is a payment to sustain his agreed pension, which is based on his salary and his salary is now controlled by the Government," Mr Lenihan argued.
Social Protection Minister Eamon O Cuiv called on Mr Boucher to forgo the controversial pension top-up.
"Apparently he had a contract with that pension clause in it. That is very unfortunate and it is costing a lot of money," Mr O Cuiv said.
Mr Boucher claimed the top-up followed a change in his contract, when he was elevated to the position of chief executive.
"I can fully understand the public perception of this issue and I am keenly aware of the public's reaction," he said.
"However, the position is that my contract changed and my pension needed to be funded. That is a matter between the pension fund and the company."
Mr Gilmore claimed Mr Lenihan had the legal power to intervene under banking legislation introduced last year.
"Remember now, given the level of investment and ownership that the State has in the banks, the issue that comes into play here is the rules that govern pay in the broader state sector and the banks can't be outside of that arrangement," Mr Gilmore said yesterday.
A spokesman for Fine Gael confirmed the party would be asking Taoiseach Brian Cowen and Mr Lenihan questions about the top-up in the Dail.
Fine Gael's Richard Bruton also claimed the minister could intervene, as was the case with the Anglo Irish Bank pay hikes.
"The minister now has questions to answer as to what he knew about the payment and when," he said.
"Was he consulted about this and did he give his approval? As was the case with the pay increases at Anglo Irish Bank, the minister can intervene and he needs to make a statement immediately clarifying these matters."