Fergus O'Dowd (Louth, Fine Gael) | Oireachtas source

The NTMA is a unique position in that it was established to perform commercial and market-facing functions while being funded from the Exchequer except in the case of NAMA, which reimburses the NTMA from income generated from NAMA's operations for expenses incurred in respect of NAMA. The NTMA operates along private sector lines within a public sector environment managing a complex portfolio of financial and risk management businesses. It was established in the first instance to manage the national debt because it was no longer possible to successfully manage that debt within the Department of Finance. It is a hybrid model specifically designed to carry out commercial functions which could not be successfully performed within the traditional public service structure.

The legislation which established the NTMA in 1990 expressly positioned it outside of the wider public service structures with the operational freedom to negotiate market-competitive salaries. The essential feature of the business model is that there are no general pay grades, no incremental pay scales and staff are employed on the basis of confidential individually negotiated contracts. This business model was designed to enable the NTMA to compete with the private sector and attract and retain specialists in mid career who would not normally be attracted to working in a public sector environment. The ability to attract and retain specialists in mid career has been the key ingredient in its success. It has enabled the NTMA to quickly staff itself with the professional expertise necessary to carry out the new functions which Government awarded it over the years.

It has had to recruit for NAMA, the banking unit and NewERA over the past four years. Its number have gone from 169 at the end of 2009 to 657 at the end of 2013, of whom 332 are working for NAMA. It has had to pay market-competitive salaries to get these staff and salaries paid reflect the market. The employment of staff recruited on the basis of specified purpose contracts lasts for as long as their specific function is required. Indeed, some 16% of staff in the NTMA are employed on the basis of fixed-term or specified purpose contracts.

The Government has no plans to seek to alter the business model in this Bill. One of the main reasons it is proposed to assign the new commercial functions contained in the Bill to the NTMA is its success in performing the commercial functions assigned to it and the flexibility offered by its business model. A business of the size and complexity of the NTMA poses particular challenges and it is critical that the NTMA retains the ability to vigorously compete in the market to attract staff with the necessary skills to effectively manage the risks involved.

I note that the public service pension deduction and reductions in remuneration imposed by the Financial Emergency Measures in the Public Interest Act 2013 were applied to the NTMA. Prior to the application of the provisions of the Act, members of the NTMA senior management team whose salaries exceeded €200,000 had agreed to a 15% reduction in salary or such an amount of salary as exceeds €200,00 if application of the full 15% reduction would bring their salary to below €200,000 on foot of a request from the Minister for Finance.

The salary cap does not apply to the NTMA. However, the Government would expect that the NTMA would only pay salaries in excess of the salary cap where it is clear that the market rate for the post in question requires such a level of remuneration if candidates of sufficient calibre are to be attracted to the post.

I can supply details of the salary band to the Chairman, but they have already been published in parliamentary questions and the National Treasury Management Agency, NTMA's accounts. The NTMA can pay staff bonuses, but it is important to note that, in recent years, only a small number of contractual bonuses have been paid.