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Banking Sector Remuneration

Dáil Éireann Debate, Thursday - 27 February 2014

Thursday, 27 February 2014

Ceisteanna (74, 75, 76)

Michael McGrath

Ceist:

74. Deputy Michael McGrath asked the Minister for Finance the total payroll savings that will be achieved by Bank of Ireland in 2014 and 2015 as part of the implementation of the Mercer report; the way this is broken down between pay and pensions; the number of persons who will experience a reduction in their remuneration; the total savings that will come from reductions in executive remuneration; and if he will make a statement on the matter. [10236/14]

Amharc ar fhreagra

Michael McGrath

Ceist:

75. Deputy Michael McGrath asked the Minister for Finance the total payroll savings that will be achieved by AIB in 2014 and 2015 as part of the implementation of the Mercer report; the way this is broken down between pay and pensions; the number of persons who will experience a reduction in their remuneration; the total savings that will come from reductions in executive remuneration; and if he will make a statement on the matter. [10237/14]

Amharc ar fhreagra

Michael McGrath

Ceist:

76. Deputy Michael McGrath asked the Minister for Finance the total payroll savings that will be achieved by Permanent TSB in 2014 and 2015 as part of the implementation of the Mercer report; the way this is broken down between pay and pensions; the number of persons who will experience a reduction in their remuneration; the total savings that will come from reductions in executive remuneration; and if he will make a statement on the matter. [10238/14]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 74 to 76, inclusive, together.

As the information requested by the Deputy is forward looking, I am not in a position to provide this given its commercial sensitivity. However the Deputy may be aware that both Bank of Ireland and Allied Irish Banks are due to announce their 2013 annual results next week while permanent tsb is scheduled to announce its results on 26th March. I would expect that each of the banks will give an update on their progress in delivering targeted cost efficiencies on these dates. 

In relation to the Mercer report specifically, I have stated in a reply to an earlier Parliamentary Question  that based on the letters received from the banks detailing their respective strategies, and in light of the various subsequent industrial relations developments, I was satisfied that each of the banks would deliver remuneration cost savings of 6% to 10%. 

Each bank's individual proposal can be summarised as follows:

Bank of Ireland focused on changes to the defined benefit pension scheme that will affect all staff who are members of this scheme. The Deputy will be aware an agreement has now been reached with the IBOA in this regard. AIB included the closure of the defined benefit scheme to future accrual along with other changes including an increase in working hours which were agreed with the IBOA last July. Permanent tsb focused on the wind-up of the defined benefit pension scheme for all staff who were members of this scheme and this has now been completed.

For clarity, senior management in the banks have made the following contributions: in the case of Bank of Ireland the proposed pension changes affect all staff in the BSPF scheme including the Chief Executive. In the case of AIB reductions in pay and benefits of higher earners ranging from 7.5% to 15% were implemented in the second half of 2012 and it also should be noted that the members of the AIB Leadership Team all joined the bank since 2008 and receive reduced pension contributions when compared with their predecessors. In the case of ptsb all senior management joined the bank since 2008 and are on lower remuneration levels than their predecessors.

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