THE COUNTRY’S former top civil servant Dermot McCarthy received a combined retirement and pension package worth over €700,000 after stepping down this summer.
Mr McCarthy, secretary general to the Government, retired in July after 11 years in the position. He was also secretary general to the Department of An Taoiseach. As the taoiseach’s chief adviser, he was entitled to attend all Cabinet meetings.
During his tenure of more than a decade, Mr McCarthy was most associated with the social partnership process. He was secretary general to three taoisigh: Bertie Ahern; Brian Cowen and, in recent months, Enda Kenny. He was the taoiseach’s main adviser during the Northern peace process. He was also in position when the banking sector collapsed; when the economy was thrown into recession and when the previous government was forced to rely on intervention from the EU and IMF.
In addition to his annual pension of €142,670, Mr McCarthy was also paid a once-off lump sum of €428,011. He was also entitled to another special severance payment of €142,670. The overall package was worth €713,000. Details of Mr McCarthy’s package were released to RTÉ under the Freedom of Information Act.
On retirement, all public servants are entitled to a lump sum, worth 1.5 times the final salary. The sum is untaxed for all but the highest earners and has become increasingly contentious in recent years. While Mr McCarthy’s annual salary had fallen from €285,000 to €208,000 as a result of a series of pay cuts affecting high-earning public servants and ministers, his final salary for pension purposes remained the original figure of €285,000, leaving him with the lump sum of €428,000.
He will pay no tax on the first €200,000 of the €428,000 but following changes in this year’s Finance Act will pay tax of 20 per cent (or €45,600) on the remaining €228,000. The net worth of the lump sum is €382,400.
A Government spokeswoman said it was committed to ending the “exceptionally generous pension regime” for those at the top of the public and private sectors.