Wednesday 21 August 2019

Legality of Central Bank 'bonuses' to be examined by officials

The Central Bank headquarters in Dublin
The Central Bank headquarters in Dublin
Shane Phelan

Shane Phelan

A senior Government official is to examine whether secret "bonus" payments made to some staff at the Central Bank were legal.

Robert Watt, the secretary general at the Department of Public Expenditure and Reform, said he was "surprised" to learn of the payments, believed to be worth more than €20,000-a-year to some employees.

Mr Watt, who recently missed out to economist Philip Lane in the race to be selected as the next Governor of the Central Bank, told the Dáil spending watchdog his department would explore whether the payments were allowable under financial emergency legislation.

The Central Bank, which regulates financial services, is making the payments in a bid to retain skilled employees who can obtain better pay in the private sector.

Employees who accept the payments must give longer notice periods in the event they decide to leave. They must also agree to keep the payments confidential.

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

The Central Bank said the scheme would cost €500,000 if all payments are made and insisted the arrangement was allowable under the legislation.

However, when quizzed on the issue at the Public Accounts Committee (PAC), Mr Watt said he did not know if the payments complied with pay limits contained in the Financial Emergency Measures in the Public Interest (FEMPI) legislation.

"We are surprised at the payments. We have just heard about them," he said.

Mr Watt said his department did not have a role in approving the payments. However, as the originators of the FEMPI legislation, it could look into the matter. "The key issue is: Are they consistent with the legislation that governs the pay arrangements for staff at the bank? That is something we will explore," he said.

PAC chairman John McGuinness said he would be worried if the situation was "the start of the banking structures giving the two fingers to the Government again, which they did previously".


Mr McGuinness said it was important for Government departments to indicate that such payments would not be tolerated.

In a statement, the Central Bank said the payments were made "in accordance with strict governance and to specified criteria" and were compliant with FEMPI legislation.

It has also disputed the description of the payments as "bonuses", insisting they be described as "retention payments".

The payments, the first of which was made last year, were not performance-related, but designed to address challenges in attracting and retaining staff.

Most of those in receipt of the payments were junior managerial staff, the Central Bank said.

Concerns have been raised 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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