Revealed: Monster pensions of the men behind bank crisis
Published 23/04/2011 | 05:00
RETIRED bankers, politicians and regulators who were among those making the key decisions which led to the state bailout will enjoy pensions of between €115,000 and €650,000 a year.
The monster pensions are on top of multi-million euro termination payments, tax-free lump sums and golden handshakes for the 10 men at the centre of the banking collapse.
Pensions experts last night calculated that the cost of providing the generous pensions that the likes of former Taoiseach Bertie Ahern, mandarin David Doyle and top bank bosses such as Brian Goggin will receive will top €60m over the course of their retirement.
The revelations come just days after it emerged that former AIB managing director Colm Doherty has received a payment and pension package worth €3m.
It also comes in the wake of a stark warning from the Central Statistics Office which shows that almost 900,000 workers, mainly in the private sector, have no pension at all.
However, ordinary workers are either directly paying for the massive pensions of the boom-and-bust bosses or are rescuing the banks paying out the generous retirement packages. An ordinary worker would need to put aside €35,000 a month to fund the type of lavish pension that is to be paid out to the likes of former regulator Patrick Neary and ex-Taoiseach Brian Cowen, a special investigation by the Irish Independent shows.
Mr Neary had insisted in 2008 that the Irish banks were so well capitalised that they would be able to withstand any loan losses that might arise.
One of the most generous pensions is going to former Bank of Ireland boss Brian Goggin, an annual retirement payment of €650,000.
The State has had to put €3.5bn into the bank and may have to put in a further €5.2bn.
Former AIB boss Colm Doherty has ended up with one of the best retirement deals.
There was a storm of outrage when it emerged this week that he was paid a total of €3m last year, with €2m of this in the form of a payment in lieu of money going into his pension.
He will retire on a pension of €303,000.
The details of the lottery-type figures being paid to those whose shortcomings contributed to the crisis comes days after the Nyberg report attributed blame to most sections of Irish society for the banking collapse, but did not name anyone.
One of the top officials at the time of the controversial bank guarantee, David Doyle, stepped down at the age of 60 with a €600,000 golden handshake and an annual pension of €115,000.
As well as being secretary general of the Department of Finance during the time when key decisions were made, Mr Doyle was a member of the board of the Central Bank.
Pensions expert with the Independent Trustee Company Aidan McLoughlin said last night it would cost between €5m and €6m to buy the sort of pensions that retired ministers and former Taoisigh are receiving. He said the costs of paying out the €3m a year in pensions will amount to at least €60m over the lives of the bankers, politicians and regulators.
Mr McLoughlin added that a person would need to shell out around €10m to buy the type of retirement deal on the open market that Colm Doherty has.
The furore over Mr Doherty's lavish payments came as the latest report into the banking crisis attacked a herd mentality within the financial system from 2003 to 2009.
The 156-page Nyberg report, based on 140 individual interviews and 200,000 documents, contains damning revelations about how the banks were run in the final years of the boom.
The Nyberg report said the last Government should have bought itself more time and weighed up cheaper alternatives before opting for the banking guarantee -- the largest bailout in the State's history.
The report also revealed that Mr Neary, the Financial Regulator, and Central Bank governor John Hurley assured the Government in 2008 that the banks would not run into trouble and would be solvent up until 2011.
Mr Doherty, the former head of capital markets in AIB, was appointed as managing director of the bank in November 2009.
He departed a year later after former Finance Minister Brian Lenihan told the board of AIB to terminate his contract in the wake of the State's second capital injection in the bank.