Business Irish

Wednesday 13 December 2017

Watchdog criticises 'extraordinary' €20m bonus fund for Nama workers

Derek Moran, secretary general at the Department of Finance, and second secretary Ann Nolan arriving at the Dail Public Accounts Committee at Leinster House yesterday
Derek Moran, secretary general at the Department of Finance, and second secretary Ann Nolan arriving at the Dail Public Accounts Committee at Leinster House yesterday
Shane Phelan

Shane Phelan

The head of the Dáil's spending watchdog has criticised a €20m fund which will see "bonuses" paid to Nama officials to stop them leaving the agency before it is wound down.

The Public Accounts Committee (PAC) heard Nama had been given approval to make the payments over the next five years after fears were expressed that it was losing key staff.

So far, 71 Nama staff have expressed an interest in receiving the payments, with 51 formally signed up.

Department of Finance second secretary general Ann Nolan described the sums to be paid as "retention payments" and said the staff involved would receive them as part of their redundancy.

Should they leave Nama before a date agreed with the agency, they would forego the payment, she said.

"They are actually redundancy payments and they don't get paid unless they stay to a date that suits Nama," she explained.

Ms Nolan was unable to say how much each payment would amount to, but insisted caps applied and that payments would not be more than €200,000.

However, the move was strongly criticised by PAC chairman John McGuinness, who described the payments as "bonuses" and said "an extraordinary amount of money" was involved.

Details of the Nama retention payments come just two weeks after it emerged a similar scheme was being operated by the Central Bank for a select cohort of staff.

Ms Nolan said the Nama scheme had been sanctioned last year.

However, she said in relation to the Central Bank scheme, no sanction was required from the department and it was a matter for the Central Bank's board.

Mr McGuinness said it appeared the retention payments at the Central Bank had been designed to be secret and questioned the example being set for the banking sector.

"If you allow these bonuses under the heading of retention payments, you are allowing the Central Bank to set a trend that these payments are allowed," he said.

"And then the whole thing gets out of control, similar to the bonus culture that existed."

Mr McGuinness added: "I think you are heading down a road that is hard to control once you have that precedent set."

He said the payments sent out "the wrong message" and that there needed to be caution, even if there was a need to retain key personnel.

The department's secretary general, Derek Moran, who sits on the board of the Central Bank, said the retention payments being made there fully complied with Financial Emergency Measures in the Public Interest (FEMPI) legislation, which set limits on pay.

The Irish Independent revealed a fortnight ago that the Central Bank had set aside €500,000 for the payments, which are being made to people in middle managerial positions.

It is understood individual payments made have been for in excess of €20,000.

Some 29 staff have already received the payments, worth up to 20pc of gross salary.

Concerns have been raised about the payments by the Unite trade union, which is seeking information on how the payments came about at a time when the majority of staff were subject to 20pc pay cuts.

Irish Independent

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