UL pledges to pay executives’ €1.2m pensions from private funding

University of Limerick has insisted taxpayers' money will not be used to fund moving two executives from a subsidiary company to its own State-funded pension scheme at a cost of more than €1 million.

Last month, a Comptroller and Auditor General (C&AG) report found that the university’s defined benefit pension scheme was set to close to new entrants in late 2012.

However, two executives employed by a subsidiary company – Plassey Campus Centre, which supports the development of the university – were added to the scheme just weeks before it closed.

The university said the two executives had been promised pension benefits equivalent to college employees. However, the C&AG found no documentation to support this.

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The additional pension benefits received by the two executives were valued actuarially at more than €1.2 million.

The Irish Times understands that UL recently wrote to the Higher Education Authority to say the funds involved will be drawn from commercial activity and not from public funding.

Future deficits

It says it will establish a separate pension control account for the two employees, and any future deficits that arise will not be met from Exchequer funds.

It is understood to add that the original decision has not yet resulted in any cost to the State given that the two individuals and the company have unspent cash pension contributions totalling more than €500,000.

The two individuals – on salaries of just over €125,000 – had been on a defined contribution scheme linked to the company prior to the move.

Sources say the pension arrangement happened several years before the current president, Dr Des Fitzgerald, took over the university.

The issue is likely to come under scrutiny b y the Dáil's Public Accounts Committee (PAC), which has been highly critical of aspects of higher education spending.

Other colleges involved in controversies involving the use of public funds have previously made claims that any funding at issue would only be drawn from private income.

These arguments, however, have typically met with short shrift from PAC members, who say it is a case of “robbing Peter to pay Paul”.

UL has introduced a series of sweeping changes to its governance over the past year or so following a series of spending controversies.

Transparency

Dr Fitzgerald has led changes which he says are designed to promote transparency in university spending and confidence in the sector in general.

A series of issues from before his time still continue to dog the university, however.

Last month’s C&AG report also highlighted the practice of awarding “professional added years” for pension purposes at UL.

These provisions are designed to compensate for the inability of certain professional or technical staff to qualify for a full pension based on 40 years’ service by mandatory retirement age.

An analysis of awards in these two universities between 2012 and 2016 found that UL awarded its employees much more generously than DCU.

The success rate for these applications at UL was 89 per cent compared to 52 per cent at DCU.