Dáil Éireann Debate, Wednesday - 20 March 2013
218. Deputy Derek Nolan asked the Minister for Finance his plans to introduce a pension levy for AIB management; if there will be any reduction in their pensions or increases in contributions to their pension fund; and if he will make a statement on the matter. [13822/13]
View answerAs the Deputy will be aware AIB announced in 2012 that it plans to close the defined benefit pension scheme to new accruals and as part of this process is in on-going discussions with staff and the Unions. AIB is committed to ensuring that all elements of pay, including base pay and benefits, are in line with the bank’s operating performance and recognise the materially altered environment for banks operating in Ireland. All changes need to be made against a backdrop of historical contracts that were put in place in a different operating and ownership environment. Following the publication of the Review of Remuneration Practice and Frameworks at the Covered Institutions, I have directed the covered institutions including AIB to come up with plans to meet the State’s objectives. Those objectives mean a saving of 6%-10% of total remuneration costs through reductions in payroll, pension benefits and other measures.
I also wish to point out that the Pension Related Deduction (PRD) which is known as the pension levy only applies to people belonging to public service pension schemes and does not apply to semi-states or the private sector. Irrespective of the Minister’s shareholdings in each of the covered institutions, no public service pension schemes exist in those institutions and therefore the pension levy does not apply.
