Cowen says pension top-up not a personal payment

BANK OF Ireland chief executive Richie Boucher’s €1.5 million pension top-up was not a personal payment, Taoiseach Brian Cowen told the Dáil.

Mr Cowen also insisted he was not aware of what was going on at Irish Nationwide Building Society during his period as minister for finance.

As he understood, said Mr Cowen, a €1.49 million contribution had been made to the Bank of Ireland pension fund, and not to Mr Boucher personally.

“Contrary to how this is being portrayed, this is a payment into an overall fund which provides for pensions of most Bank of Ireland staff. If it was not made, the fund would be short of resources to meet its obligations to all Bank of Ireland pensioners and staff who retire in the future.’’

Mr Cowen was replying to Fine Gael leader Enda Kenny, who said that on March 30th Minister for Finance, Brian Lenihan, had told the Dáil that the banks had played fast and loose with the State’s economic interests.

Mr Lenihan, he added, had gone on to say that senior people in banking had made appalling lending decisions which the taxpayer would pay for.

Mr Kenny said that Bank of Ireland was a covered institution which had received money from the taxpayer. In its report last week, the bank had approved a top-up of €1.5 million for the chief executive.

“Now, Taoiseach, the chief executive in this case is not a new entity,’’ said Mr Kenny.

“He was an insider who came from Ulster Bank . . . who led the charge, in fact, for a vigorous property development process within the Bank of Ireland.’’

Mr Kenny said that under section 50 of the bank guarantee scheme, the Minister for Finance could require certain obligations to be adhered to and specify them in writing.

“In view of the fact that hundreds of thousands of people in our country are out of work . . . in view of the fact that thousands and thousands of people, as we speak, are scrabbling to put the few cents together to meet the increased rate in variable mortgage repayments . . . we have a situation where the Bank of Ireland, a covered institution, has approved a €1.5 million top-up in pension for its chief executive,’’ he added.

“And you stand, and your Government stands, idly by despite the fact that your Minister for Finance said that senior bankers had made appalling lending decisions.’’

Mr Kenny asked the Taoiseach if he was happy “at a time of economic crisis for thousands and thousands of our people’’ that the bank had approved such a pension top-up.

He said the Taoiseach should invoke the section of the guarantee scheme that gave the Minister for Finance authority in law to intervene and have the decision reversed.

The Taoiseach said: “I understand the public perception of this, and I certainly do not hold any brief for the Bank of Ireland pension fund.’’

Labour leader Eamon Gilmore said the Taoiseach was making it sound as if the top-up to the pension fund was for the bank’s porters and tellers.

It was widely known, said Mr Gilmore, that there were problems in the Irish Nationwide Building Society and that bad practices were going on there as well as enrichment of some of the top people in the company.

The Taoiseach, said Mr Gilmore, was minister for finance between 2004 and 2008. He asked if anybody had given him a report, or brought to his attention, what was going on in the building society.

Mr Cowen said it had not been brought to his attention.

“Certainly not,’’ he added.