Sunday 22 September 2019

Row over 'secret' bonuses to Central Bank staff

Patrick Honohan, Governor of the Central Bank
Patrick Honohan, Governor of the Central Bank
Charlie Weston

Charlie Weston

A SELECT number of managers in the Central Bank are being paid secret bonuses, it has emerged.

The main trade union for Central Bank staff is taking legal advice over the confidential payments of more than €20,000.

Unite says the payments breach emergency laws cutting pay and banning bonuses in the public sector.

Those getting the bonuses have to sign a contract promising to keep "the fact and the amount of the payment confidential", the union said quoting from a copy of contracts it obtained.

The latest storm comes after the Central Bank hiked the levy on banks, insurance companies and brokers to plug a hole in its staff pension fund.

The bonus payments are being described as "retention" pay to certain senior staff to stop them leaving, according to a letter sent to the Central Bank by the union, and seen by the Irish Independent.

Unite's regional officer Colm Quinlan wrote: "Following the pay cuts suffered by our members, they will be appalled that the Bank has engaged in these actions without their knowledge."

The letter outlines that the bonuses are based on 20pc of gross salary, with a number of executives getting in excess of €20,000.

Mr Quinlan says the staff in the Bank were not aware that Governor Patrick Honohan, inset, who is due to step down in days, and his senior management were making secret deals with selected senior executives.

Staff in the Central Bank have been subject to financial emergency law, called the Financial Emergency Measures in the Public Interest Act (FEMPI). The union contends the secret bonuses contravene FEMPI and it is seeking legal advice on this.

FEMPI has seen the 1,400 staff paying the pensions levy, which averages 7pc, and taking pay cuts of up to 15pc, as well as being required to work longer hours.

Unite accuses the governor and management at the Bank of using the money saved from pay cuts to fund the secret bonuses, and reduce any surpluses going to the Exchequer.

Contacted for a comment, Mr Quilan said: "Given the role that a bonus culture played in our banking crisis, it is extraordinary that the Central Bank - charged with oversight of the country's banking system - now appears to itself be part of that culture."

A spokeswoman for the Central Bank claimed just 30 people got the retention bonuses.

"These payments are made in a number of tranches designed to ensure the continuity of service of staff," the Bank said in a statement.

It confirmed that if all payments were made, the total cost would be €501,530.

"There is no ongoing salary increase involved and the amounts paid are non-pensionable and are subject to normal deductions, including the pension levy," its statement said.

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