Dáil Éireann Debate, Tuesday - 13 November 2012
208. Deputy Pearse Doherty asked the Minister for Finance in respect of the €1.1billion top-up made by Allied Irish Banks to the group pension scheme in August 2012, if he will estimate the capital value needed by a pension fund in order to make an annual payment of €529,000 to a scheme member, as is reportedly the case with annual payments to the former chief executive officer of AIB, Mr Eugene Sheehy. [49494/12]
Amharc ar fhreagraThe Deputy will be aware that the transfer of assets to the pension fund earlier this year was undertaken in order to facilitate the early retirement component of the voluntary severance program of the bank. 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 return to long term viability. It is highly likely, that in the absence of the early retirement scheme, the bank would have been unable to achieve its target staff departure figures on a voluntary basis which would likely have required the need for significant numbers of compulsory redundancies. AIB informs me that for an employee retiring at age 60 with 40 years pensionable service and an annual pension of €529,000, AIB estimates that the capital value accumulated in a fund to provide this annual figure would be approx. €10.5m.
