The government cannot legally reduce the salaries of bankers who were awarded contracts before it came to power, Minister for Finance Michael Noonan has insisted.
Speaking in Limerick today, the minister claimed reports that bailout money has been used to help fund the pensions of former senior bank staff were “incorrect”.
“The story is incorrect as it is written,” he said.
“Pensions that were arranged prior to the government coming into office between the government and the banks. It is not legally possible for the new government to put them aside but that has been said several times before — there is nothing new in that,” he said.
Minister Noonan insisted caps have been applied to bank salaries since his government took office.
“What is happening is that all the bank executives are being hired below the level set for their salaries and their pensions will be in proportion to the new level of their salaries,” he said.
Minister Noonan added that Fine Gael opposed the pensions and salaries of the country’s top earning bankers including former AIB chief executive Eugene Sheehy when they were in opposition.
“If a previous government made a legal agreement on redundancies of senior executives from the banks, it is not legally possible for this government to set that aside. That is our problem — much as we would like to do so.”
Asked should bankers return their high pensions to public coffers, he said it was “up to themselves”.
Regarding speculation about an increase in the Universal Social Charge (USC) for high earners, Mr Noonan said people would have to “wait and see” until the budget is announced on December 5th.