On Wednesday, it almost seemed a throwaway question that revealed that AIB had in August 2012 shovelled €1.1bn of the €20.7bn taxpayer bailout into its pension fund to plug a hole which put at jeopardy “super pensions” payable to former executives at the helm of the bank during the boom which has now spectacularly turned to bust; it should be said that the pension fund also pays the more bread-and-butter pensions of former AIB employees who might have been on modest salaries. The transcript of the hearing is not yet available, so the deputy who first extracted the information from the AIB CEO David Duffy isn’t getting credit on here at this juncture.
Since Wednesday, there have been a number of messages received in confidence on here which suggest that we have just scratched the surface of bank pension funds and how they were managed prior to the bust, their activities in supporting bank share prices and how they have had to be rescued by the taxpayer. It seems like there might be (several) huge stories there, but they will require resources for a subject that goes beyond the remit of this blog.
What we know for now from the AIB hearing on Wednesday and the Bank of Ireland hearing on Thursday is that pensions of €500-650,000 are being paid to ex-AIB CEO Eugene Sheehy and ex-BoI CEO Brian Goggin. The AIB pension fund was topped up with €1.1bn of funds that can be attributable to the taxpayer bailout. It seems that the BoI top-up was not disclosed but BoI has to date received a gross bailout from the taxpayer of €4.7bn.
What we don’t appear to know if pension funds at Anglo or Irish Nationwide – now merged into IBRC – or at Irish Life – not split between Permanent TSB and Irish Life – or at the Educational Building Society, have been topped up with taxpayer funds. Nor do we know how exposed the banks’ pension funds were to shares in their own banks – after all we know that Anglo was keen for the Maple 10 to acquire shares in their bank, it is hardly beyond imagination that the Anglo pension fund also invested in Anglo shares.
This whole area seems to have received little oversight or scrutiny to date. And on a related subject, it is gobsmacking that AIB employees facing redundancy may get 5-6 weeks salary per year of service whilst Vita Cortex workers had to stage a sit-in earlier this year to secure just 2.9 weeks per year of service. Vita Cortex didn’t need a €20.7bn bailout from the taxpayer.
So here’s your blogpost to hang comments on. It will be updated when the transcripts become available, and judging by the volume of messages received, there may be further revelations which will also be posted here.