Monday 27 January 2020

Brian Lenihan's own officials lobbied him on pay cuts

But former minister refused to bow to pressure to reverse 'painful' cuts to mandarins' pensions

The late Brian Lenihan
The late Brian Lenihan

Daniel McConnell Correspondent

Former Finance Minister Brian Lenihan was lobbied by retired senior officials from his own department to reverse cuts to their pensions, the Sunday Independent can reveal.

Documents obtained under the Freedom of Information Act reveal Mr Lenihan came under pressure from former staff who claimed the cuts were in breach of the terms of the Croke Park Agreement.

The revelations come amid growing acceptance that the Government is considering a new pay deal for public sector workers ahead of the next General Election.

The documents show how, on several separate occasions, former officials sought to maximise their influence with their ex-colleagues on their own behalf or on behalf of their new employers.

They also reveal how the late former minister came under pressure from some politicians acting on the retired mandarins' behalf to reverse the cuts.

These included former Government Chief Whip and Dublin South TD Tom Kitt, who lobbied Mr Lenihan on behalf of former officials unhappy with having their retirement packages reduced.

The documents show that the retired officials questioned whether the public service pension reduction "was in accordance with the Croke Park Agreement".

However, Mr Lenihan did not bow to the pressure, according to the documents. In January 2011 Mr Lenihan said the level of taxes being used to fund public service pensions was "not sustainable".

He also disputed that the cuts were in breach of the Croke Park deal, saying that his Financial Emergency Act gave him the necessary legal powers. Mr Lenihan said he had to act immediately to deal with the problem, or else public servants would be facing even greater cuts to their pension in the future.

He wrote: "The measure is tapered and makes a greater reduction from those with larger public service pensions and will be progressive."

Mr Lenihan strongly argued that those who received the biggest pension payments - including former ministers, judges and department chiefs - would be hit the most.

"Former public servants in receipt of high rates of superannuation benefit, including former members of the Government and the Oireachtas and other office holders will bear the highest reduction," he added.

Mr Lenihan concluded his response by saying he and the Government believed the cuts were "painful but necessary" to help restore order to the public finances.

The Sunday Independent had sought details of all representations from retired or departed senior officials to the department after they had left.

However, unlike other departments who released un-redacted files, the Department of Finance withheld the identities of the former officials involved.

Separately, the documents reveal that another former senior official had sought a meeting in 2013 with Mr Lenihan's successor, Michael Noonan, on behalf of Aviva Health Insurance.

The company, on foot of a report it commissioned on the dire state of the health insurance market, said it wanted to raise its concerns with Mr Noonan.

The former official wrote that the report, which was written by economist Colm McCarthy, and the impact of charging private patients for occupying public beds, would have a serious impact on the market.

"We would really appreciate an opportunity to meet the minister to brief him about the findings and our position operating in the current market conditions. We believe the public finance implications should be brought to the minister's attention."

The unnamed official made contact with Mr Noonan's private secretary about setting up a meeting with Aviva Health chief executive Alison Burns. He also sought a separate meeting with Aviva's global CEO, Mark Wilson, who was in Ireland to watch the rugby test against the All Blacks last November.

The official mentioned to Mr Noonan's private secretary that he had already been in contact with Mr Noonan's special advisor, Eoin Dorgan, and the now departed Department of Finance Secretary General, John Moran, about the meeting request.

Mr Noonan was ultimately not available to meet with Mr Wilson in Dublin, but said he was "happy to meet" with him in London the following week.

Sunday Independent

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