Saturday 23 November 2019

Pension pot of €75m for those who failed State

As another harsh Budget looms, people in power at time of crisis in 2008 are sheltered from storm, writes Daniel McConnell

Imagine giving €75m of your money to a bunch of deficient and failed politicians and officials on whose watch the worst economic collapse in the history of the State unfolded.

Well, that is exactly what the taxpayers of this country are doing for the class of 2008, the men and women of politics and the civil service who we charged with the safe running of the State and who abandoned their posts and have since departed for cosy retirement.

Many of them sat around the cabinet table during the boom and bust, failing to act to prevent the bubble or to move swiftly enough to manage the bust, yet they are the ones most protected from the damage they helped to cause.

As we head into what is likely to be the toughest and most contentious Budget of this Government's life, where all our financial circumstances are to be worsened for the seventh time since July 2008, it is always worth remembering those who led us into this disaster.

Despite the hardship they have inflicted on the country, they themselves, while gone from office, are shielded significantly from the harsh realities of the recession.

Fresh analysis of new official figures which detail the money paid to former political leaders like Bertie Ahern, Brian Cowen and their erstwhile colleagues show that the taxpayer will have to foot a total bill of up to €75m to fund their retirement and that of senior officials who advised them.

The most recent figures show that apart from earnings from his various speaking engagements around the world, former Taoiseach Bertie Ahern received a total ministerial and TD's pension of €152,331 in 2011, and is in line for the same amount every year until he dies. This is made up of a €102,396 ministerial pension and a TD's pension of €49,934, minus deductions relating to the public service pension levy.

But given his pension is guaranteed, index-linked and inflation protected, pension experts this weekend have estimated that the true and full value over the lifetime of Mr Ahern's pension is a cool €6.1m.

And his doomed successor as finance minister and Taoiseach, Brian Cowen, who has kept a low profile since leaving office, is sitting on a pension pot of approximately €6.05m.

Mr Cowen in 2011 received a total pension of €151,061, made up of a TD's retirement payment of €49,934 and a ministerial pension of €101,126. This means his pension is almost five times the average industrial salary and this is despite the fact that Mr Cowen is only 52 years old.

Another controversial figure who is to benefit from a very generous pension is former Tanaiste, health minister and leader of the now defunct Progressive Democrats, Mary Harney.

Ms Harney, who recently broke her post-politics silence when she spoke to the Sunday Independent about her private business interests, received a total pension in 2011 amounting to €129,805. Pension experts say that the full value of the pension if it were to be bought outright would be in the region of €5.2m.

Two of the most criticised members of the previous cabinet were Noel Dempsey and Dermot Ahern. The duo were blamed for misleading the public back in November 2010 over whether there would be a troika bailout.

Feeling they were misled by the Department of Finance, neither put themselves forward for re-election in 2011 and are both now in receipt of significant pensions, which are the envy of many thousands of ordinary citizens.

Mr Dempsey, a former TD for Meath West who left politics at the age of 58, is being paid a pension of €119,177, made up of a ministerial pension of €69,242 and a TD pension of €49,934.

For his part, Dermot Ahern, is also on a pension amounting to €119,965, made up of a €50,722 TD pension and a ministerial pension of €69,242.

Ex-Environment Minister, Martin Cullen, who it emerged in a Sunday newspaper recently is living the high life in Florida, is also on a pension of €119,965.

Several other members of Bertie Ahern and Brian Cowen's cabinet have not begun to receive pension payouts because of their age (and other reasons), but did receive significant, often six-figure, departure golden handshakes when they left the Dail in early 2011.

Former education minister Mary Hanafin, who lost her Dun Laoghaire seat, received a severance pay-off of €158,000, while former Tanaiste Mary Coughlan and former defence minister Tony Killeen were paid €155,000.

Former chief whip turned community minister Pat Carey, who lost his Dublin North seat, received a severance payout of €113,000, while Green Party leader John Gormley received €113,000. His fellow Green minister Eamon Ryan received €63,000 in severance payments.

But while they are the main focus of the public ire, it is not just the politicians who have done well in retirement from their service to the State.

Dermot McCarthy, former secretary general to the Government, found himself at the centre of a political controversy in the summer of 2011, when the terms of his pension pay-off emerged.

Mr McCarthy received a golden handshake pay-off of €713,000, with an annual pension of €142,670 until the day he dies. When all the elements of his pension are factored in, his pension is worth an estimated €5.7m.

David Doyle, former secretary general of the Department of Finance, who was a key adviser on the night of the infamous blanket bank guarantee in September 2008, controversially had his pension topped up to the maximum level of 40 years by the then minister Brian Lenihan.

Mr Doyle is in receipt of an annual pension payment of €115,000, putting his retirement at an estimated €4.6m.

His successor, Kevin Cardiff, will also see his eventual pension pot boosted by his term as a member of the European Court of Auditors, where he is expected to enjoy a package of €1.6m between salary and add-ons.

But the next two figures are among the most controversial as they were the ones charged with the oversight of Ireland's now disgraced financial sector.

Former Central Bank governor John Hurley left his post in 2009 to be replaced by 'outsider' Patrick Honohan, on an annual pension of €175,000 a year. His colleague, the much derided and castigated former regulator Pat Neary, who even after the bank guarantee went on national television to insist all was well in the Irish banks, is also sitting pretty on a very generous state pension.

Mr Neary, who has refused all media requests to talk since his retirement, is on an annual pension of €143,000, according to official figures. This places the value of his total retirement fund at €5.7m.

Next, we look at the toxic banks we have had to bail out to the tune of €64.1bn and those who ran them.

First, to the two main bankers who arrived in Government Buildings on the night of the guarantee on September 29, 2008.

Former AIB chief executive Eugene Sheehy, who was paid €900,000 as the bank gobbled up €3.5bn in taxpayer funds in 2009, is according to previously reported figures being paid a pension of €529,000.

Based on available information, Mr Sheehy's total pension pot could be worth a potential €18.5m over his lifetime, given his previous level of salary and generous terms afforded to bank top brass.

This is despite the bank having to be effectively nationalised because of the dire state of its loan book.

His chairman who accompanied him on the night of the guarantee, Dermot Gleeson, receives an annual pension from the State worth €47,823 relating to his time as Attorney General.

Mr Sheehy's successor, Colm Doherty, who lasted less than a year in the post following a series of rows with Brian Lenihan, still was paid €2.7m in 2010. Mr Doherty is to benefit from a pension pot worth €300,000 a year when he reaches 65, it emerged last year.

But it was the €28m pension pot of former Irish Nationwide boss Michael Fingleton that caused huge public outcry.

While poor old Fingers has seen the value of his retirement fund slashed considerably since 2008, due to a number of large judgements against him, he has repeatedly refused to hand back a €1m bonus paid to him by Nationwide, before it was merged with Anglo to become the Irish Banking Resolution Corporation.

So as we turn our minds to the Budget facing us, we must always remember those lucky people who caused all this mess and yet have managed to shelter themselves from the storm at our expense. If only we were all that lucky.

Sunday Independent

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