Minister of State at the Department of Finance Simon Harris has said he is "sympathetic" to the Central Bank of Ireland's decision to pay retention bonuses to certain key staff over the past four years.
However, he is not in favour of lifting the €500,000 salary cap on bank executives until their institutions have repaid their bailout funds.
Speaking to The Irish Times, Mr Harris, who has responsibility for international banking, said there "clearly is a retention issue with staff" at the Central Bank.
“I am conscious of the need to retain staff within the Central Bank. And I’m conscious also that in a growing economy, with more employment opportunities, that we are seeing a lot of people going to the Central Bank for a couple of years at various levels and then they move on into industry,” he said.
Sympathetic to challenges
“Having good, competent people in the Central Bank is vital and costs money. It’s for the management structure of the Central Bank to decide the day- to-day remuneration levels . . . but I’m certainly sympathetic to the challenges that they are facing in terms of the retention of staff.”
The payments have caused considerable controversy since the Central Bank revealed recently that it had paid €234,176 to certain staff since 2011.
Some 29 employees are currently in receipt of the money, which equate on average to 21 per cent of their salaries. The Central Bank did not seek Government approval for the payments and insists they are not bonuses and comply with financial emergency legislation on public-sector pay.
Trade union Unite believes the payments breach the Government’s ban on bonuses in the public sector and has questioned why only certain staff were paid the money.
Mr Harris said it was up to the management of the Central Bank to decide the best means of retaining its staff and “politicians shouldn’t be overly populist” on the issue.
The Minister was not supportive of any “deviation in general” from the Coalition’s overall policy in relation to public sector pay but there were “specific retention issues” in certain areas, citing the Central Bank and the provision of legal advice to the Government as two.
But Mr Harris was “certainly not proposing that the State or any element of the State write a blank cheque” for certain public sector workers.
“It’s up to the management of the Central Bank to put forward a very cogent case [for the retention payments].”
Taxpayer
While supporting the retention payments, Mr Harris was clear that the cap on bankers’ pay should not be removed.
"Not as long as the taxpayer is still owed significant billions of euro," he said. "We're in the very early stages of getting all of that money back. Michael Noonan has a plan to get it back and until it's back I think the cap should remain."
