Gormley condemns Boucher pay-out

Bank of Ireland chief executive Richie Boucher's €1.5 million pension top-up is a private pension issue and not matter for direct Government involvement, the Taoiseach has said.

Also speaking today, Minister for the Environment John Gormley said today he would forgo the €1.5 million pension top-up if he were in the position of Mr Boucher.

Mr Boucher received a top-up to his pension of €1.49 million last year. This was part of a total remuneration package worth €1.99 million for the bank boss. The figures are outlined in the company’s annual report for the nine months to December 31st, 2009.

The bank said the top-up was to meet “contractual arrangements”. Based on his current salary of €623,000, Mr Boucher will receive a pension of €367,570 a year.

Mr Cowen said the Minister for Finance had already set out the Government position. "We have under the guarantee agreement controlled the salary component and obviously no bonus is to be paid," he said.

"This [the top-up] relates to a prepaid pension plan that has to be funded at the request, presumably of the trustees, to ensure that there is sufficient in that fund to make for the pension provision of people in that chief executive level when that retirement issue arises, so it is not a matter of direct input for government - obviously that’s the position on that."

Questioned as to what young couples struggling with mortgages would make of the additional pension support, Mr Cowen said: "Well obviously one understands the public perception but . . . it is important to point out that we have capped the salary and there is no provision for bonuses. This issue arises where the trustees of a pension fund insist on it being kept in funds so that the payments are made."

Repeating that the Government had moved to cap bankers' salaries and had dealt with the bonus issue, the Taoiseach said this was a private pension issue, entailing arrangements in place contractually with the chief executive. "I’m not in a position here to justify it or otherwise, I’m just saying that’s the position," he said.

However, Mr Gormley said people working in the public sector in particular were enraged when they heard stories of “personal enrichment”.

Asked today if he agreed with Minister for Social Protection Éamon Ó Cuív , who said at the weekend he would forgo the top-up if he were in Mr Boucher’s situation, Mr Gormley said: “If I were in that position, yes, but I mean that’s a personal view. I mean I think responsibility dictates we as a society go forward together, the public sector and the private sector.

“When people in the public sector particularly see that sort of personal enrichment it can only have one effect and that is to really enrage people. That makes our task as government so much more difficult.”

However, Mr Gormley said while the “wrong signal” was being sent to people, there was little the Government could do about the situation.

“It’s a very difficult issue. It has caused, I think it’s fair to say, outrage amongst a lot of people, certainly people I spoke to last Saturday. I certainly share that disappointment. Coming as it does now in the middle of very important negotiations with the unions and indeed when it’s out to ballot in relation to those pay talks,” he said.

“That juxtaposition sends the wrong signal to people. I feel personally strongly about it, but again I felt strongly about the wage increases in ESB for example and others where the Government isn’t in a position to do anything about it, that’s unfortunately the case.”

Minister for Finance Brian Lenihan said over the weekend the pension top-up was not a matter for him to intervene on. While he could not justify it, there was nothing he could do about it.