Parliamentary Question addressed to the Minister for Finance

To ask the Minister for Finance the action that can be taken to curtail the outrageously generous pensions paid to some of the former top managers in the covered banks; the way these pensions are funded; if he will assure taxpayers that recapitalisation moneys do not and will not underpin these pensions; and if he will make a statement on the matter?

Reply

As the Deputy will be aware none of the institutions in receipt of State Aid has used State Funds directly to offset deficits in defined benefit pension schemes. This assurance, provided by the banks, would cover the direct transfer of funds provided in State Aid towards the reduction of deficits in the banks pension schemes. The institutions do contribute, as required by law and regulation, to pension schemes in the normal way. Deficits that exist in pension schemes in the institutions are being reduced generally through increased employee contributions and reductions in future benefits.

The Deputy will appreciate, however, an institution’s funds are not generally segregated by source for distribution in specific ways. It is very difficult in terms of a banks funding to categorically state that State Aid does not indirectly find its way through normal employee contribution or pre State Aid contractual arrangements into pension funds. However, in terms of the principal at issue I am assured by the institutions that none of the institutions has used State funds directly to off-set deficits in defined benefit pension scheme funds.