I am aware from my discussions with NAMA, and with the NTMA which employs staff assigned to NAMA, of the difficulties being experienced by NAMA in terms of retaining and recruiting appropriately skilled and experienced staff. It is important that NAMA, on behalf of the taxpayer, has the expertise available to it to carry out its commercial mandate with the aim, at minimum, of eliminating the contingent liability of the State arising from its current portfolio and from the portfolio that it may acquire later in the year from the special liquidators to the Irish Bank Resolution Corporation, IBRC.
All NAMA staff are employees of the NTMA and are assigned to NAMA by the NTMA. NAMA advises that 59 staff assigned to NAMA by the NTMA have resigned from the agency since inception. Some 28 members of staff have resigned so far in 2013 and 22 members of staff resigned in 2012, representing a 10% turnover rate in that year. We have entrusted NAMA with the extremely important task of mitigating risks and recovering value for the taxpayer, and so would hope NAMA is able to attract and retain professionals best able to ensure NAMA's success.
The CEO and chairman of NAMA have recently expressed concern in this regard in light of public pay restrictions, and have highlighted the fact that with the departure of each employee there is a loss of business knowledge, continuity and momentum. Although a certain level of staff turnover is to be expected as the property market recovers, which is arguably positive for the development of asset management expertise across the Irish market, it will continue to prove a challenge to NAMA.
I am satisfied that there are extensive safeguards in place to protect the confidentiality of information held by NTMA employees, including those assigned to NAMA. Employees assigned to NAMA by the NTMA, as is the case with all other NTMA staff, are subject to section 14 of the National Treasury Management Agency Act 1990 which prohibits an employee from disclosing any information obtained while carrying out his or her duties as employees of NTMA. Employees assigned to NAMA are also subject to a prohibition on release of confidential data under sections 99 and 202 of the NAMA Act 2009. NTMA employees, including those assigned to NAMA, are subject to the Official Secrets Act. Contravention of these prohibitions is a criminal offence. These protections do not cease at the point of resignation but apply indefinitely and extend to former employees.
The notice period for NTMA employees assigned to NAMA is typically three months. NTMA contracts for employees assigned to NAMA have a provision entitling NTMA to place the employee on garden leave at any point during the notice period during which time the employee may not work for another employer. Following a review of its policy in respect of notice periods and post-termination restrictions on employment, which was conducted on NTMA’s behalf, as employer, by the law firm Matheson, NTMA is implementing a number of changes to its employment contracts, including the introduction of longer notice periods of three to six months, up from one to three months, for middle and senior management employees and garden leave provisions to be included in all new employment contracts.
In addition, a new provision is being added in new employment contracts, where relevant, that restricts departing staff from performing services for a new employer during the first six months following the termination of their employment with NTMA, relating to a transaction or other matter in respect of which they participated directly or substantially in the course of their employment with NTMA and were in possession of confidential information as a result. In respect of NTMA employees assigned to NAMA, this provision has been introduced for all new employees and existing employees as they are promoted. As I pointed out, the three-month notice period and garden leave provisions already apply to NTMA staff assigned to NAMA. Despite the concerns raised I have every confidence that NAMA will continue to meet its bond redemption targets and achieve its overall business plan objectives.