Outrage at €1.5m pension top-up for bank boss
Published 17/04/2010 | 05:00
ONE of the country's leading bankers was at the centre of a new storm last night after it was revealed he was given a massive €1.5m pension top-up.
Bank of Ireland pumped the huge sum of money into the pension pot of chief executive Richie 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 came under intense pressure to justify the payment amid accusations it had undermined the salary cap imposed on bank chiefs last year.
The revelation emerged as ordinary Bank of Ireland staff were being balloted on plans to cut their pensions.
Union leaders and the opposition parties last night described the payment to Mr Boucher, who took over the helm of the bank in May of last year, as "offensive".
"We're shocked this has come out at a time when staff are being asked to agree to changes to their own pension schemes," Irish Bank Officials' Association general secretary Larry Broderick said.
As earlier revealed in the Irish Independent, up to 18,000 members of various Bank of Ireland schemes are set to bear the brunt of the bank's attempts to plug a €1.6bn deficit in its defined-benefit pensions. Defined-benefit schemes entitle retirees to up to two-thirds of their final salary.
Mr Broderick said he would be calling on Finance Minister Brian Lenihan "to justify this payment".
However, the Department of Finance refused to comment last night.
The revelation emerged as EU chiefs ordered Bank of Ireland to sell its life and pensions, asset management and ICS Building Society arms as a condition for its €3.5bn bailout last year.
BoI is currently finalising plans to go cap-in-hand to shareholders and the Government as it seeks to raise €3.2bn to line its coffers as it faces multi-billion euro losses on assets going to NAMA and on its remaining loan book.
The controversial pension top-up is in addition to an annual salary of €623,000 being paid to Mr Boucher, confirmed in its annual report yesterday.
The Government has put a €500,000 salary cap on chief executives of state-guaranteed banks.
But Mr Boucher is contractually entitled to a €220,000 so-called pension cash allowance, which he voluntarily cut to €123,000, the bank said. The bank said there was a shortfall in Mr Boucher's pension fund and it was obliged to top it up with the €1.5m payment.
"Following his appointment as group chief executive officer, the pension contribution for Mr Boucher includes a one-off amount paid to the bank staff pensions fund required to cover the contractual option allowing him to retire at age 55 on a pension of 59pc of salary," the bank said.
The lucrative pension deal follows former bank chief executive Brian Goggin's remuneration topping €3m in the 12 months to March 2009. Mr Goggin is entitled to draw on his estimated €650,000-a-year pension from this June.
Fine Gael finance spokesman Richard Bruton said: "It is offensive to ordinary people who are now having to pick up the pieces for their incompetence to see these types of payments."
Labour Party finance spokesman Joan Burton described the payment as "two fingers" to the taxpayer.
BoI revealed at the end of last month it had made a €2.97m underlying pre-tax loss for the nine months to the end of December, after setting aside more than €4m to cover bad loan losses.