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Leaders' Questions

Wednesday, 12 June 2013

Dáil Éireann Debate
Vol. 806 No. 2

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Leaders' Questions

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin The Minister for Finance, following publication of the Mercer report on bankers' pay and so on, requested the banks to reduce the pay of bank workers by between 6% and 10%. The impression given by the Taoiseach and others at the time was that this was designed for the fat cats in the banks, the people earning hundreds of thousands of euro. The executives of Permanent TSB responded to the Minister's diktat by ceasing contributions to the defined benefit pension scheme, essentially winding up the scheme, with devastating losses for ordinary workers. The bank's response was only to target workers in the defined benefit pension scheme and some 70% of the workers will suffer devastating losses as a result of this action. Up until then the company had provided €127 million per annum. It decided to cease paying this €127 million and has withdrawn it from the pension scheme. Workers face a reduction of anything from 50% to 70% in their pensions. Those who expected to receive a pension of €30,000 a year on retirement will now only receive €5,000 a year. That is how devastating the loss will be for them. There is no recognition of length of service or the amount of contributions paid into the scheme to date.

The Government has washed its hands of this issue. When the Minister requested banks to implement a reduction in pay of between 6% and 10% in line with the recommendation made in the Mercer report, he said he would not be prescriptive and has consistently held to that line. It is up to bank executives to do what they wish. I remember the Taoiseach grandstanding here with me and others saying this was all about the fat cats in the banks and that they would have to lead by example. They led by example - they took very few cuts themselves. In this case they will not take any hit on their pensions, but they decided unilaterally to hit the workers via their pensions, with no cuts being made to their pay or anything else. They have done this indiscriminately and unilaterally in an arbitrary manner. They are savaging the pensions of workers in Permanent TSB, which is unfair and wrong. The Taoiseach has the power to change this. I ask him, first, to accept that this is unfair. Second, will he reassure the House that he will ask the Minister for Finance to engage with the executives of the bank to reverse this approach, which represents a very cynical implementation of a Government diktat in terms of overriding a pay reduction instruction to the banks? Those at the bottom of the pile are being hardest hit as a result of this action. I ask the Taoiseach to intervene and reverse it.

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny I do not know the details of the issue the Deputy has raised. Clearly, we had discussions in the House about the extraordinary levels of pay paid to the chief executives of a number of the banks. A few years ago they were as high as €3 million. When the Government came into office, an upper limit of €500,000 was put on the pay of top bankers and that limit has not been breached.

In regard to the Mercer report, the Minister recommended to the banks that they make a substantial contribution from pay and pensions in the order of 10%. The Government has not yet considered the Mercer report.

In regard to the TSB, this is an internal decision that has been taken by management and it has nothing to do with the Minister for Finance. I understand the matter is before the Labour Court; therefore, it is obviously not appropriate for me to comment without having all of the details before the Labour Court. I take the Deputy's point on the impact of this decision on ordinary workers and those on very ordinary rates of pension, but this is an internal management decision by the TSB which, as I understand it, is before the Labour Court.

Deputy Micheál Martin: Information on Micheál Martin Zoom on Micheál Martin The Government has the submission from the banks since the end of April. It is extraordinary and incredible that the Taoiseach says he does not have a clue about this issue and has no detailed knowledge of it, despite the fact that he protested loudly here that the Mercer report would be the be all and end all to get at the fat cats in the banks - the big executives with the big salaries. That was the context. The reality is, however, that it is hitting the workers at the lowest level in terms of their pension entitlements in a discriminatory and targeted manner. There are 1,200 workers involved in this institution. That is the reason they believe there is a disconnect between the official speak of the Government and the talk here and their experience of implementation of the report. The rhetoric means nothing to them when their pensions are being savagely cut as a result of this decision. It is not good enough for the Taoiseach to say this is an internal matter for the banks on this occasion because the Government took a decision to tell the banks to find between 6% and 10% in savings. The Taoiseach cannot wash his hands of the matter and say: "We do not care. It is not our business if the banks follow through on that instruction by hitting pensions that people have paid into for over 25 or 30 years." There are people in an incredible state of anxiety about what this means for them in their personal lives. They cannot believe they received a communication from their union and the bank stating they were sorry about this, but the pension they thought they would be receiving was going to be cut by 70% or more. That is the reality. Workers are coming to tell us this.

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