Wednesday 25 April 2018

Pension pay is not fair

The former Government Secretary, Mr Dermot McCarthy retired at age 57
The former Government Secretary, Mr Dermot McCarthy retired at age 57

Sir -- The former Government Secretary, Mr Dermot McCarthy retired at age 57 after 40 years service on a retirement package worth €713,000. In addition to an annual pension of €142,670, Mr McCarthy received a once-off lump sum of €428,011. He also got a special severance payment of €142,670.

The lump sum is based on 1.5 times final salary; even though Mr McCarthy's annual salary had fallen from €285,000 to €208,000 in recent years, his final salary for pension purposes remained at the original figure of €285,000, giving him the lump sum of €428,000.

Mr McCarthy paid no tax on the first €200,000 of the €428,000 but following changes in the Finance Act 2011 paid tax of 20 per cent (or €45,600) on the remaining €228,000. The net worth of the lump sum is €382,400.

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