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Our money funds fat-cat bank pensions

AIB is using public cash to fund fat cat bosses' pensions, while at the same time refusing to offer blanket debt forgiveness to distressed mortgage owners.

A State-owned pension scheme is helping to pay retired bankers up to €500,000 a year, it has emerged.

But despite the taxpayer bailout, there is still no light at the end of the tunnel for over- stressed mortgage owners.

Chief Executive of State-owned AIB, David Duffy, has admitted that a €1.1bn bailout of its pension scheme is helping to pay the 'super-pensions' of former senior managers.

AIB, which was saved by billions in taxpayer's cash injected into the bank in two separate bailouts, is now using their assets to fund the pensions of some of those responsible for the bank's problems.

The news comes as the bank ruled out blanket forgiveness for those struggling with debt.

The Central Bank's Fiona Muldoon and John Moran of the Department of Finance urged the bank to "get real" on the issue of mortgages and warned that they risked sinking the economy for a second time

However, while the bank has yet to introduce any definitive measures for easing the burden on it's under-pressure mortgage holders, the bank's chief executive has admitted that their pension scheme is helping to fund the hefty pensions of the former bank chiefs.

Former Chief Executive Eugene Sheehy, in charge of the bank at the time of the infamous bank guarantee, is reportedly receiving a €500,000 annual pension.

His successor, Colm Doherty, who stepped down after AIB's second bailout, will get a pension of €300,000 a year when he turns 65.

A total of €1bn of AIB loan assets were transferred to its pension fund as a part of an early-retirement scheme, which plans to cut 2,500 jobs.

Mr Duffy has defended his bank's position, saying seven out of 10 of the 33,000 AIB borrowers who had been moved to interest-only mortgage repayments were not making their payments.

The bank said the remaining 30pc, about 10,000 customers, would require more complex solutions and that the bank hoped to introduce some over the next year.

hnews@herald.ie


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