21% payouts for senior Central Bank staff queried by Department of Public Expenditure's Robert Watt

A senior government official has said the Central Bank needs to “satisfy themselves they are compliant with the law” after revelations managers have been given retention payments worth 21% of their salaries at the same time as workers have faced 20% cuts.

In a statement yesterday, the Central Bank confirmed it began making the payments to a select number of staff, in 2014, in order to ensure they could continue to convince potential employees to work for them.

In total, approximately 30 staff, the majority of whom are in junior management positions, shared €500,000 in extra funds last year, a figure that equates to €16,000 per person.

However, the Central Bank has defended the policy amid union claims it may not have been ratified by the Government and that they jar with 20% cuts for other authority employees in recent years.

A senior Department of Public Expenditure official said there may be legal questions to answer.

Speaking at the latest meeting of the Public Accounts Committee, the department’s secretary general Robert Watt, who mised out on the Central Bank governor position after Trinity College lecturer Philip Lane was appointed instead, said he and his colleagues were unaware of the agreement.

“We’ve become aware of these payments today [through media reports], we’re surprised, I just heard them.

"The Central Bank has to satisfy themselves they are compliant with the law. I don’t know,” he said.

PAC chair and Fianna Fáil TD John McGuinness said the department had an onus on itself to find out why the deals were allowed as it could be seen as “banks giving the two fingers to the country again”, a claim Mr Watt did not dispute.

Unite union regional officer, Colm Quinlan, had earlier told RTÉ he was aware of at least 29 people who have received the payment, which he said was not performance-related, and that it remains unclear whether the funds were approved by the department.

He said the Central Bank must explain how these payments were agreed at a time when the “majority” of people working at the authority have been hit with 20% pay cuts in recent years.

In a statement, the Central Bank said the payments were made “in accordance with strict governance and to specified criteria” and were compliant with existing FEMPI, Financial Emergency Measures in the Public Interest, legislation.

“The Central Bank of Ireland met with the Unite union representatives in May this year to brief them on the retention policy and have provided them with more details and expected numbers since then.

"The Central Bank has been and remains covered by the FEMPI legislation and this will include the proposed revisions to the legislation,” it said.

“In some areas and for certain skills, these challenges can be acute. This is why, in very limited circumstances, it has become necessary to take action to address this risk,” the statement said.

The retention payments were not bonuses and applied “to fewer than 30 people, located in two areas of the bank”, the bank said, adding that the total cost of the payments would be €501,530.