Pearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to Parliamentary Question No. 205 of 13 November 2012, if he will confirm that a €440,000 average payment to the pension fund in respect of each of the 2,500 roles at Allied Irish Bank identified for redundancy was required in order to secure the voluntary redundancy of each of the 2,500. [51372/12]

Michael Noonan (Limerick City, Fine Gael)
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I have been informed by AIB that the transfer of the €1.1bn portfolio of loan assets was made using arm’s length valuations by two independent external parties and was agreed by both the Trustee and the Board of the Bank. There was a very significant discount to the nominal value of €1.1bn. The transfer of these assets to the pension fund was needed in order to facilitate the early retirement component of the voluntary severance program of the bank. The early retirement scheme created a Minimum Funding Standard deficit in the pension fund which was bridged by the transfer of the assets. Had the transfer of assets not taken place, the early retirement component of the voluntary severance could not have proceeded as it would have required a cash contribution from the bank.

The voluntary severance scheme in the bank overall is expected to result in annual savings to AIB in excess of €200m which is a critical component of AIB’s long term return to viability.

Pearse Doherty (Donegal South West, Sinn Fein)
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To ask the Minister for Finance further to Parliamentary Question No. 205 of 13 November 2012, if he will set out the terms offered to the 2,500 employees whose roles have been identified for voluntary redundancy, if he will include the number of weeks redundancy for each week of service; and if there is any cap on the sums payable. [51373/12]

Michael Noonan (Limerick City, Fine Gael)
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I have been informed by the bank that the terms of its voluntary severance programme agreed up to 31st March 2014 were a severance payment of four week’s pay per year of service including statutory entitlement or, three week’s pay per year of service plus statutory entitlement. The individual staff member, if accepted to leave the organisation under the scheme, is able to choose which option suits their particular circumstances. These payments are subject to a cap of the lesser of two years annualised salary, including all pensionable elements, or €225,000. These terms applied in the United Kingdom also apart from a payment cap of £190,000.

In relation to the Voluntary Early Retirement the scheme was voluntary and open only to staff in the AIB Group Scheme (DB Scheme) that were at least 50 years of age at 31st December 2012 and whose normal retirement date did not occur before this date. Hybrid members of the DB Scheme and members of the AIB Group Defined Contribution scheme were not eligible to apply for early retirement.