IMO axes committee in McNeice pay scandal

The Irish Medical Organisation (IMO) has axed the committee that signed off on a gold-plated deal that could have cost the union €25m once its chief executive retired.

The decision to terminate the remuneration committee, in existence for 22 years, was taken at the weekend by IMO president Dr Paul McKeown.

It remained unclear yesterday who set up the committee in the first place or how IMO members were selected to take part.

The role of the remuneration committee is in the spotlight since it emerged it agreed a deal in 2003 with outgoing IMO chief executive George McNeice that left the union with a contractual obligation of up to €25m. Members of the committee at the time included current Health Minister James Reilly along with doctors Fenton Howell, Mick Molloy and then president of the IMO, the late Dr Cormac McNamara.

The role of the surviving members, if any, in the McNiece deal will be examined as part of a forensic review of the union’s finances.

Fianna Fáil health spokesman Billy Kelliher said the pension pot was an “outrageous sum” of money and is “out of line with acceptable practice”.

He said: “As Minister for Health he (Mr Reilly) has a clear role in negotiating on the public’s behalf with the IMO on a range of issues and his potential involvement in this particular crisis is a matter of legitimate public concern and should be clarified.”

The deal came to light last year when Mr McNeice sought clarity in relation to where his pension stood because he was coming to the age (52) where he could claim three years’ salary if he left the organisation.

Dr McKeown said the contract allowed large proportions of big bonuses “to enter the following year’s salary” lifting the base. In this way, Mr McNeice’s salary went from €250,000 in 2003 to €493,000 in 2008.

At this point, Mr McNeice agreed to a voluntary five-year conditional pay freeze. The conditions meant the meter continued running on parts of his bonuses which he could claim retrospectively when the freeze deadline expired.

At the same time, Mr McNeice imposed an unconditional pay freeze on the remaining IMO employees, none of whom has a defined benefit pension scheme and whose salaries are all topped by the next highest salary of €103,0000.

The conditions attached to the chief executive’s freeze meant when it expired this month, he could seek a salary rise bringing him to €550,000, with a commensurate increase in defined benefit liabilities, hence the potential €25m exposure. The union was advised to settle, reducing liability to almost €10m, protecting the IMO’s solvency.

Mr McNeice was also in receipt of an annual €60,000 salary from the IMO’s financial services (IMOFS) arm. The IMOFS also has a pension scheme.