BoI expected not to seek partial pension surrender

It is believed that Bank of Ireland will not be following AIB’s lead and writing to former executives asking them to surrender part of their pensions.

AIB is writing to 14 former executives who were with the bank between the years 2005 and 2008 and who have since left the institution. Bank of Ireland declined to comment on whether it would make a similar move. Former Bank of Ireland chief executive Brian Goggin is in receipt of a yearly €650k pension.

A spokesman for Permanent TSB said: “PTSB has no former director with a pension above €250,000 per annum and therefore is not in the same position as former directors of other banks.”

IBRC is in litigation with several ex-senior executives at Anglo Irish Bank and Irish Nationwide. Moreover, former Anglo executives Seanie Fitzpatrick, Willie McAteer, and Pat Whelan will stand trial in 2013 on charges of financial irregularities.

It emerged on Tuesday that former AIB executive Eugene Sheehy has voluntarily returned over half of his €529k a year pension.

Taoiseach Enda Kenny praised Eugene Sheehy’s “leadership” as he urged other ex-bankers to follow suit. Mr Kenny told the Dáil the Government could not intervene in the matter due to the contractual obligations involved, but that appointments made since the general election were in line with pay caps: “I’m glad Eugene Sheehy has made a personal decision here and I do hope that the others that have been written to by the chief executive of AIB will follow suit by making appropriate decisions.”

Apart from previous chief executive Colm Doherty, AIB declined to disclose the identity of the other executives to whom it has written. It is believed former managing director Donal Forde and former finance director John O’Donnell are among those who have been contacted. According to a 2008 remuneration report, Mr Forde received a pension contribution of €134,000 and Mr O’Donnell some €112,000 that year.

There is growing political pressure on the Government to introduce punitive measures on the pensions of former executives with the bailed-out banks.

However, solicitor Ian Devlin, of the Eversheds firm, says it is not possible to enact policies targeting individuals or groups of individuals: “Just as legislation which seeks to differentiate between people solely on the basis of age, gender or similar criteria may not survive constitutional challenge, any legislation which applies solely to executives or former executives of particular financial institutions would also be exposed to similar risks.”

The Government was able to bring in financial emergency legislation, which introduced the public sector pensions levy, because did not disproportionately interfere with property rights in the context of the State’s serious economic difficulties and it was applied to all public sector employees, said Mr Devlin.

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