Bankers’ pensions move ‘essential’

Using taxpayers’ money to bring pension funds of bankers up to standard was a regrettable but essential move in reviving the economy, Communications Minister Pat Rabbitte has said.

Moves such as imposing a high tax on the pensions of any individual group in society would not be allowed by the Constitution, but he suggested that the Government may make some moves to address the issue in the upcoming budget.

He was commenting on an ESRI report that showed employers were putting 36 times more money into the pension packets of top executives than the rest of their workforce.

He said the outrage was understandable over the pensions of people at the top of the banking sector.

“In respect of the transfer of funds to AIB, some of those monies were used to refurbish the pension fund and if that had not been done, the 2,500 contemplated redundancies would not have been able to happen or people would be made redundant in circumstances where they would have had very poor pension entitlements and none went to shore up the former leaders of the banks who had already retired before that happened and whose pension rights had crystallised. Under our Constitution, private property is a very, very difficult issue to address,” Mr Rabbitte said.

He said he was not seeking to justify the remuneration of senior bankers and that it was the worst aspect of the crash to which the bankers contributed that many people close to retirement found their pensions eroded.

“It is arguably the most serious, most negative fallout from that and there is a huge amount of work going on in the whole issue of pensions, but we are a long way off holding out the prospect of improvement,” Mr Rabbitte said.

“The Government is not at the absolute limit of what it can do. Anything we do will have to be creative and withstand a challenge and that drags me into a discussion I can’t engage in involving a little event just three weeks away [the budget].

“The Government finds the remuneration packages of leaders of the banking community as unacceptable as other taxpayers but we are constrained in what we can do.”

Meanwhile, Sinn Féin finance spokesman Pearse Doherty has again lashed out at Finance Minister Michael Noonan over his failure to ask senior bankers to take a voluntary pay cut.

Mr Doherty was reacting to figures revealed in parliamentary questions on Tuesday night which underline the lavish lifestyles still in existence among the bailed-out banking elite.

The responses show Irish Life’s CEO Kevin Murphy is receiving a total annual pay packet of €586,000 — breaking the Government’s own salary cap.

He is due to receive a €305,000 yearly pension when he retires in the coming weeks, while ex-AIB boss Eugene Sheehy’s total pension pot is worth an estimated €10.5m.

A total of 38 senior bankers at Irish Life are on more than €150,000 a year — including 11 on more than €200,000 and two on more than €400,000 — while nine Permanent TSB officials are on €200,000 to 399,999.

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