Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

At the outset, let me state that the outrage expressed by the Deputy in his question is not the sole preserve of the Opposition. It is shared in equal measure by the Government. However, the Deputy will readily appreciate from the time his party was in office that the Government’s scope for action to claw back or reduce such pre-existing contractual entitlements is limited due to constitutional and legal reasons. These issues are well known to all members of the House. Indeed, some of the pay and pension entitlements he refers to were authorised by the Government which he supported. The Government shares the abhorrence of the public at these extravagant pensions but its scope for action to claw back or reduce such entitlements is limited due to constitutional and legal reasons. Pensions are generally taken to be deferred income and any action to reduce a pension in payment needs to be comprehensively founded lest it run the risk of being considered an unjust attack by the State on the property rights of individuals affected by the proposed legislation. The Government will seek to explore all avenues and options to address this issue subject to the necessary legal constraints.

The Deputy infers in his question that the Government has not taken steps to address this issue. This Government has introduced stringent controls on remuneration levels under the conditionality imposed arising from the round of State investment in the banks in summer 2011. We went much further than the previous Administration by including all elements of the pay package, bar pension contributions, under the €500,000 cap. This is being honoured, as proven in the case of new CEO appointments at AIB and PermanentTSB respectively. No breaches of the cap have been allowed by this Government, unlike the previous policy where exemptions were authorised and the Deputy is now asking me to repair the damage caused by breaches of those caps.

Additional information not given on the floor of the House.

This Government has also committed to conducting a review of remuneration policies and practices at the covered institutions. The purpose of the exercise is to review thoroughly all remuneration practices at the covered institutions with the object of simplifying remuneration and compensation structures, discouraging excessive risk-taking and to better align pay and reward to long term value creation.

I expect the consultant’s report to be delivered by year end whereupon consultations with the various stakeholders will commence. As I have said previously, I fully recognise that there is a real public interest in the levels of remuneration at the covered institutions and have committed to placing the details underpinning the review into the public domain.

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