Lenihan dismisses PAC request for pension review

FINANCE Minister Brian Lenihan has dismissed arequest from a powerful Dáil committee to specifically review lucrative top-up pension deals for senior public servants.

In a letter to the Public Accounts’ Committee (PAC) Mr Lenihan said he did not support its call to draw up new guidelines governing arrangements for retiring chief executives of semi-state bodies.

These controversial deals, sanctioned by successive ministers, have seen chief executives treated as if they had worked for more years than they had, just to qualify for higher pensions.

The PAC wrote to the minister this summer after it criticised the years added to the service of Rody Molloy to encourage him to step down as chief executive of Fás.

This has the potential to be worth an extra €1 million to Mr Molloy during his retirement.

The PAC wanted all such deals to be subject to cabinet approval and expressed concern the top-up practice was rife in the public service.

However, in a letter which has been published by the PAC Mr Lenihan said he did not want to single out chief executives’ pension plans for a review.

“I consider that the addition of notional years for CEOs on retirement should not be examined in isolation.

“I consider it should form part of a wider examination that is underway currently, which followed on from the publication of the Green Paper on Pensions,” he said.

Chairman of the Committee Bernard Allen criticised the minister’s response which he said had unnecessarily parked the problem along with the wider pension debate.

“After our meeting we concluded this was not just a one-off. And we were very concerned that this practice is widespread we asked that there be strict new guidelines.

“I believe it should not be parked and it should be dealt with as a matter of priority,” he said.

But Mr Lenihan said the Government was preparing to bring forward proposals on wider pension reform in the near future.

The Government has been promising this review for a considerable time but Mr Lenihan said it is now at an “advanced stage”.

He said this was considering the abolition of all added years’ arrangements used to top up public service pensions.

Mr Lenihan is under pressure from various quarters to reform the pay and perks of top officials.

This weekend Ógra Fianna Fáil voted in favour of a motion calling on the Government to cap the pay in the public sector at €250,000.

This would include all semi-state agencies and RTÉ.