Howlin indicates AIB pay cap request unlikely to be granted

MINISTER FOR Public Expenditure Brendan Howlin has said he does not believe AIB’s request to breach the €500,000 pay cap for its incoming chief executive will contain anything that is exceptional.

In a strong indication that the Government is unlikely to accede to the banks’ request, Mr Howlin said the consensus view among Cabinet Ministers was that the €500,000 limit was adequate.

The Minister was speaking at a briefing following yesterday’s Cabinet meeting.

Minister for Finance Michael Noonan was due to brief Ministers on the request he received several days ago from AIB executive chairman David Hodgkinson.

However, Mr Noonan was unable to attend the meeting because his return flight from the United States was delayed. In his absence, the other members of Cabinet discussed the request, said Mr Howlin, but have yet to be briefed on the AIB request.

“There was a short discussion at the meeting and the consensus view was that the cap that is there is adequate.

“We have not seen the request but would not expect that to be extraordinary,” he said.

At the same briefing, the Taoiseach’s spokesman said the circumstances to justify a breach of the cap would have to be extraordinary and exceptional, as the salary already is 2½ times that of Mr Kenny’s.

The Taoiseach, speaking in the Dáil, strongly hinted the request would be turned down.

“I have not seen any evidence of any exceptional case. The cap was put in place for very good reason. No good reason has come across my desk as to why that should change.” Mr Howlin also confirmed new legislation will be published tomorrow that will affect the pension entitlements of public servants recruited from next year.

The Single Pension Bill proposes to change the pension terms and conditions of new entrants into the service from next year.

The main provisions of the Bill is that the pension will be uniform across the entire public service – and replace the multiplicity of different pensions in place for existing employees – and that the pension will be based across career average salary and not the final salary.

In addition, the non-taxable lump sum of 1½ times salary paid on retirement – which has been a source of much controversy – will no longer be a part of the pension arrangements for new entrants.