Reilly to be asked to join review of €25m deal

Mon, Jan 14, 2013, 00:00

Minister for Health James Reilly is to be asked to take part in a review established by the Irish Medical Organisation into how a contract was agreed with its former chief executive which left it with a potential liability of up to €25 million.

The organisation, which represents GPs, hospital consultants, non-consultant doctors and public health doctors, said Dr Reilly was one of a number of doctors who were on the organisation’s remuneration committee when the contract with the former chief executive George McNeice was agreed in 2003.

A special meeting of members in Mullingar on Saturday heard that the contract was agreed with Mr McNeice by a former president and the then chairman of the remuneration committee, Dr Cormac Macnamara, who has since died.

Terms and conditions

It heard that in a letter to the organisation at the end of the contract talks, Dr Macnamara stated that the other members of the remuneration committee were aware of the terms and conditions in the agreement.

The organisation identified the members on the remuneration committee at the time as Dr Macnamara, Dr Reilly, Dr Fenton Howell and Dr Mick Molloy. A spokesman told journalists after the meeting there was a dispute as to their knowledge of the contract and of the level of involvement they had with the committee.

It is understood that at the closed meeting on Saturday, some of those identified as having been on the remuneration committee disputed that they had ever been actively engaged with it. Sources said a number of doctors indicated that they had been asked to serve but that it had never met, they did not believe they had contributed to it in any way and they had not been aware of the terms of the chief executive’s contract.

“We will be asking the members of the remuneration committee to feed into this process,” said president Dr Paul McKeown. Asked if this would include Dr Reilly, he said: “I would hope so.”

Sources close to Dr Reilly said last night he would give any assistance he could .

Superior defined benefit

The organisation’s leadership said under the terms of the contract, Mr McNeice had a base salary of €250,000. However two bonus arrangements saw this increase steadily to €493,000 by 2008 when a pay freeze was put in pace.

It said while other members of staff had a defined contribution pension arrangement, Mr McNeice had a superior defined benefit pension scheme.

In addition to a salary of €493,000, Mr McNeice also received a salary of €60,000 from the organisation’s financial services arm, IMOFS.

At the start of last year, Mr McNeice had indicated he wanted to reach clarity and certainty around his retirement entitlements. It was then that the level of exposure was identified and ultimately the liability.

Dr McKeown told the meeting a settlement deal with Mr McNeice reached before Christmas included a pension fund of €4.5 million, a termination payment of about €1.5 million and annual payments for 16 years to the value of about €3.6 million.

Up to his departure just before Christmas, George McNeice had worked for the Irish Medical Organisation for nearly 30 years. Originally from Kerry, he had served as a civil servant in the Department of Health before moving to the IMO as an industrial relations official in the 1980s. He became chief executive of the organisation in 1993. The IMO has about 5,000 members and employs about 20 staff. At the time of his departure he was on a salary of nearly €500,000.