Taxpayer hit with €650,000 pension tab for ex-chief of bailed-out BoI
Published 02/11/2012 | 05:00
BANK of Ireland's chief executive Richie Boucher has admitted that the rescue of the bank by the taxpayer is helping to pay his predecessor's €650,000-a-year pension.
The massive pension paid to former Bank of Ireland (BoI) chief executive Brian Goggin is higher even than the current salary of the bank's top director.
Mr Boucher said the bank's pension fund for retired staff is supported by cash from the bank, which in turn has been supported by the €4.8bn taxpayer injected.
He was responding to questioning from Fine Gael's Kieran O'Donnell at a hearing of the joint Oireachtas Finance Committee.
Pension benefits were cut in 2011, including his own, Mr Boucher said. Mr O'Donnell said that Mr Boucher will still get a potential pension of €400,000 a year when he retires.
"Nothing has changed," the Limerick TD said.
The BoI chief and other senior executives from the bank were questioned for three hours by TDs and senators, following sessions with AIB and Irish Bank Resolution Corporation (IBRC).
In a sometimes tense session, committee chairman Ciaran Lynch said Mr Boucher had provided "minimalist" answers to the committee.
The chief executive said he was unable to answer certain questions because of stock market rules.
It threatened to overshadow the broadly positive story that BoI had gone to the Dail to tell TDs and senators.
The bank is actively lending to home buyers and meeting fully a target of €3.5bn in new lending for small businesses, without "playing with numbers," Richie Boucher said.
Confirmation that some of the cost to the State of bailing out Bank of Ireland is going on large pensions for retired executives came a day after similar news from AIB.
On Wednesday state-owned AIB admitted that a €1.1bn bailout of its pension scheme is helping to pay retired executives as much as €500,000 a year.
These include a €500,000 annual pension reportedly being paid to former chief executive Eugene Sheehy.
Like Mr Goggin, Mr Sheehy was in charge at the time of the infamous bank guarantee in 2008.
AIB plugged a hole in its pension scheme in August by handing €1.1bn of loan assets to its pension pot. The novel scheme to rescue the pension fund was designed to help slim down the bank by funding an early retirement scheme.