Ms Mary Day:

I joined the Mater Misericordiae University Hospital in 2008 as director of nursing and was appointed CEO of the hospital in January 2013. I am joined by my colleague, Ms Caroline Piggot, director of finance. I thank the committee for the opportunity to clarify the situation regarding the pension scheme administered by the Mater hospital on behalf of circa 180 staff members of the Central Remedial Clinic, CRC.

The Mater hospital administers this scheme at the direction of the Department of Health and with the full approval of the HSE. The payment of €660,000 per annum made by the CRC to the Mater hospital is the CRC's employer's contribution in respect of its staff pension scheme. For historical reasons, which I will elaborate on later, the Mater hospital administers this scheme for the CRC staff as part of the voluntary hospital superannuation scheme, which is known as the VHSS, and is the pension scheme applicable to all voluntary hospitals in the country. In return for these contributions the Mater hospital assumes the liability for CRC staff members' pension payments as and when they fall due, thus relieving the CRC of future pension payments to its employees. I would like at this point to make clear that the Mater hospital receives no payment for this service to the CRC.

In relation to the pension mechanism, the scheme is in line with public sector pension policy, whereby all pensions are funded from current revenues, namely, no specific ongoing fund is built up for future pension payments. Further, while the Mater hospital administers all payments through the scheme, the HSE's pension section in Manorhamilton authorises the authenticity of payments.

To respond to the question as to the reason the Department of Health directed the Mater hospital to undertake this scheme on behalf of the CRC, I need to take the committee back in time. The CRC had been in operation for a number of years when it sought Department of Health funding in the mid-1970s. However, for technical and legal reasons, the Department of Health at the time could not provide any funding to the CRC as it was not a hospital. To overcome this difficulty, it was decided that all funding for the CRC should be provided through a voluntary hospital. The Mater hospital being the nearest hospital to the CRC, with joint clinical commitments and through the Sisters of Mercy, provided significant support to the clinic and was, therefore, chosen to be the channel for such funding.

In 1977, the Mater hospital requested permission from the Department of Health to admit the CRC staff into the VHSS. These letters of January and August 1979 have been supplied to the committee. The Department of Health gave permission to the Mater hospital to enrol the requested CRC staff to the VHSS on the basis that funding for the clinic was processed through the hospital. This is articulated in the August 1979 letter from the Department of Health. Further correspondence to the CRC dated 2 November 2004 is a latter from Patsy Carr to the CRC from the pension policy unit in the Department of Health again reaffirming the arrangement in place with the Mater hospital. It also confirms that the CRC did not qualify to administer its own VHSS and that the Department of Health was satisfied for the arrangement to continue.

I refer finally to the correspondence from the pensions unit in the Department of Health to Mr. Paul Kiely, then chief executive of the CRC in May 2010, which again reaffirms the pension arrangement between the Mater hospital and the CRC.