Thursday 26 April 2018

Bailed-out AIB treats staff and spouses to four-star hotel stay

Killashee House Hotel
Killashee House Hotel

BAILED-out bank AIB paid for hundreds of staff and their spouses to stay overnight in a four-star hotel for a retirement course.

It brought bank staff and managers from around the country for a one-night stay in the Killashee House Hotel, outside Naas in Co Kildare, plus a meal.

The wives or husbands of the retiring AIB staff were also brought along -- on the grounds that they needed advice on how to cope with their partner's retirement.

The two-day courses were held for AIB staff of all grades and their spouses over a six-month period.

AIB has confirmed that the hotel-based courses were offered to all staff taking early retirement -- which amounts to around 1,300 people between 2012 and the first half of last year, according to its annual reports.

But it has refused to reveal how many people availed of the opportunity and what the cost was.

An AIB source said between 600 and 700 retiring staff had been brought.

It is described as a luxurious hotel and spa where midweek bed-and-breakfast for one night costs around €130 for a couple or €100 for a single person.

The series of two-day seminars for retiring AIB staff and their spouses took place mid-week between October 2012 and April last year.

AIB has confirmed that it covered the full cost. AIB has cost taxpayers €20bn to bail out and is 99.8pc state-owned.

In contrast, two other banks that received state bailouts provided information packs and helplines for their staff.

Permanent TSB has confirmed it did not provide any retirement seminars involving overnight hotel stays.

The Irish Independent has also learned that Bank of Ireland did not provide any hotel accommodation for retiring staff because this is contrary to its policy.

Labour Dublin South East TD Kevin Humphreys submitted several parliamentary questions about the AIB retirement seminars over a six-month period but got very little detail from the bank in response.

"It's completely unacceptable that a bailed-out bank that has cost us €20bn is taking up to 700 staff and their spouses away for a night in a luxury four-star hotel," he said.

Mr Humphreys questioned why AIB had not used its own facilities. And he called on the bank to give a cast-iron guarantee that it would not happen again.


"This is another example of poor management decisions in AIB. We need to see them living within their means," he said.

AIB said it was now reviewing its retirement seminars, given that the number of staff leaving the bank over the next two years will be lower.

Since its bailout, AIB has hiked bank charges and increased variable mortgage interest rates in an attempt to return to profitability. It has also closed down rural bank branches. And it plugged a hole in its pension scheme in 2012 by transferring €1.1bn of loan assets to its pension pot to fund the early retirement scheme.

Part of this money is also helping to pay the "super-pensions" of former senior managers. These include a €500,000 annual pension reportedly being paid to former chief executive Eugene Sheehy, who was in charge at the time of the infamous bank guarantee in 2008.

The retirement seminars were held as a result of AIB's plan to reduce its staff numbers by 2,500. Most of this is being achieved through early retirements for staff in their 50s and 60s, but there is also a voluntary severance programme for younger staff.

However, the retirement seminars have not been provided for those taking voluntary severance.

The aim is to deliver €170m in savings per year through the staff reduction programme. However, AIB's annual report puts the costs associated with the staff departures at €322m -- €182m for those taking early retirement and €140m for those taking voluntary severance. It has now revised the overall cost back to €291m.

AIB said that it was a long-standing and valuable process at the bank to have seminars to help staff plan for their retirement. It said the seminars were organised in a very cost-effective manner -- but refused to say how much they cost.

By Michael Brennan and Maeve Dineen

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business