Monday 5 December 2016

Top civil servants are still in line for golden handshake

Anne-Marie Walsh Industry Correspondent

Published 03/10/2011 | 05:00

TWO new heads of government departments may get the same golden handshake terms as retired civil servant Dermot McCarthy.

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The Government cannot guarantee it will have abolished controversial payments that dramatically boost the highest-paid civil servants' pension pots before the top roles are filled.

The delay in clamping down on the bumper payouts after a basic seven-year secretary general term is likely to cause public fury.

The vacancies will arise when Department of Enterprise secretary general Sean Gorman and Department of Education secretary general Brigid McManus retire shortly.

It is understood that Mr Gorman's contract expires this month, while Ms McManus is expected to go at the end of January.

They are in line for packages worth up to €634,000, based on their pre pay-cut salaries.

The terms -- known as Top Level Appointments Committee (TLAC) terms -- allowed Mr McCarthy to walk away with a €713,000 package last July. Mr McCarthy held one of the highest paid roles in the secretary general grade

The Government has already appointed four secretary generals on the same terms since it came to power, despite ministers' public outrage at the payments to the outgoing staff.

It now faces a crucial decision when it considers replacements for the enterprise and education jobs.

TLAC terms mean secretary generals get a "special severance" payment worth half their annual pay and up to 10 extra years added to their pensions that they have not worked.

This is on top of a pension lump sum worth up to one and a half times their pay, and an annual pension up to half their pay.

A Department of Finance spokesperson said a "review" of the TLAC terms was now under way but was unable to say when it would be completed.

It announced a new public sector pension scheme last week that means the TLAC terms will no longer exist for new recruits to secretary general positions.

However, secretary generals are rarely new recruits so the two upcoming roles are likely to be filled from within the ranks of the civil service.

This means they will be in line for the bumper TLAC terms unless Public Expenditure and Reform Minister Brendan Howlin takes rapid action and announces the outcome of his review.

He is likely to face opposition if he alters the terms as new candidates may complain that four colleagues have already agreed contracts on the same terms under the coalition.

"The minister is reviewing TLAC terms for future secretary generals," said a spokesperson.

"This would relate to incumbents who become secretary general."

However, the spokesperson could not offer any assurances that future candidates would not receive the same payouts.

The origins of the special severance payments and added years, which are also paid to the country's 34 county managers, are mysterious.

They are paid to compensate the senior public servants for the fact that their contract only lasts seven years and they may not get another job. However, the public servants, who may already have long service, can get extensions to their contracts and receive the payments even if they are over retirement age.

The Irish Independent recently revealed that the secretary general terms were a "secret" government decision by a previous Fine Gael and Labour coalition, in between governments in March 1987.

Irish Independent

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