Retired bankers with massive pensions of more than €100,000 could see their payments slashed by up to 40% under proposed changes to the law.
New legislation published by Fianna Fáil calls for retired executives of State-guaranteed banks to take the hit to restore public confidence in the tarnished institutions.
Finance spokesman Michael McGrath said the Government has no reason to reject the Bill, which he described as deliverable and achievable.
“The Oireachtas has a duty to respond to the justifiable public anger surrounding the extraordinary pensions paid to some of the country’s most senior retired banking executives,” said Mr McGrath.
Mr McGrath said they are confident on legal advice it is constitutional and now want the Coalition to take the bill and implement it.
Mr McGrath said: "We are publishing this bill today, we are bringing it to the floor of the Dáil as quickly as possible.
"We are asking the Government to back up their words of outrage and their words of condemnation that we have heard over the last number of weeks and actually enact this piece of legislation as quickly as possible."
He said the issue came to a head at a recent Finance Committee meeting when Allied Irish Banks (AIB) revealed its defined benefit pension scheme – which had benefited from a €1.1bn bailout – was the same that pays pensions to the bank’s retired top brass.
@breakingnewsie any chance they'd cut Bertie's and Cos pensions too?— Keith Martin (@theKeithMartin) November 20, 2012
The Bill is a proposed amendment to the existing Credit Institutions (Stabilisation) Act 2010, which in itself provided for amendments to the bank guarantee scheme introduced in 2008.
The proposed amendment will allow for bankers – from banks covered by the existing legislation – on pensions from €100,000 to €150,000 have them cut by 20%.
Payments between €150,000 and €200,000 would be reduced by 30%. And any amount over €200,000 slashed by 40%.
Mr McGrath said the proposed cuts would be imposed on top of the public service pension reduction scheme, introduced earlier this year.
It saw the minimum public servant pension age hiked to 66 years and imposed a maximum retirement age of 70.
Career average earnings would be used to calculate the pension – as opposed to final salary.
“The Government cannot object in any reasonable way to what we are proposing,” he added.
The finance spokesman said ordinary people had been horrified by the exorbitant pensions paid to bankers, and that he was hopeful for cross-party support.
“This is a simple measure, it can be implemented and it will go some way to addressing the public concern and the public anger that is entirely justifiable,” said Mr McGrath.
Earlier this month, Finance Minister Michael Noonan said he was powerless to force retired executives from the bailed-out Anglo to take a pension cut.
The State bailed the bank out to the tune of around €34bn.
Taoiseach Enda Kenny later asked retired AIB executives to take a voluntary cut in their pension.
Former chief executive Eugene Sheehy accepted the need for a reduction and offered to have his annual payment of between €300,000 and €325,000 cut to €250,000.