Molloy was responsible for Lynch pension deal

FORMER DIRECTOR general of Fás Rody Molloy was the civil servant in the Department of Enterprise, Trade and Employment responsible for the pension package awarded to his predecessor, Dr John Lynch.

However, Dr Lynch, now CIÉ executive chairman, said yesterday that he negotiated the terms of his pension directly with the then minister for finance, Charlie McCreevy. He could not recall whether he met Mr Molloy during the process.

Dr Lynch had his pay rate boosted so as to increase the value of his pension, and was given a pension equivalent to 40 years’ service even though he had worked only 17 years in the public sector. He was also given a lump sum payment larger than that which would apply on the basis of his actual years of service.

A spokeswoman for the department said the pension package for Dr Lynch was agreed following a government decision in March 2000. She said Mr Molloy had responsibility for staffing matters in relation to all of the agencies under the department’s remit.

“This would have included dealing with the retirement package of former director general of Fás, Dr John Lynch.”

Mr Molloy applied successfully for the job of director general of Fás after Dr Lynch’s decision to leave the post, and took over in September 2000. He resigned last November, and the details of his pension package have since been the cause of public controversy.

Dr Lynch said he had no role in the interviewing process that led to the appointment of Mr Molloy. “I had no hand, act or part in it,” he said. An attempt to contact Mr Molloy met with no response.

Dr Lynch said he gets paid €357,000 as chairman of CIÉ but that the value of his pension of about €100,000 is deducted from that. He said he was asked to take over as chairman of CIÉ by the former minister Mary O’Rourke after chairman Brian Joyce resigned in March 2000.

He negotiated a package with Mr McCreevy concerning his leaving Fás, and left in September. He was then appointed to the CIÉ post, and remains in that position. A statutory instrument was created so as to provide for the special deal for Dr Lynch.

Taoiseach Brian Cowen has said the deal with Mr Molloy was agreed under the Labour Services Act, 1987, and did not involve Department of Finance guidelines which appear to exclude cases such as Mr Molloy’s.

However, internal Department of Finance documents that have been given to the Dáil Committee on Public Accounts show assistant secretary John O’Connell wrote to Dermot Mulligan, of the Department of Enterprise, Trade and Employment, at the time, stating that the terms being offered to Mr Molloy “are not fully in accordance” with the finance guidelines.

Also, the guidelines state that they do not apply to voluntary resignations. Mr Molloy resigned because of controversy over spending controls at Fás.