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Dublin: 21 °C Tuesday 23 July, 2019

AIB to cut managers' pay, freeze staff salaries and change pensions

Staff were informed of the plan in an email circulated today. Perks like gym memberships will also be cut.

Image: Photocall Ireland

AIB HAS TOLD staff that pay cuts for top staff, a salary freeze for staff, scrapping of perks and a change in the employee pensions scheme are all part of plans for the bank.

In an email circulated to workers chief executive David Duffy has said that there are plans for a pay freeze until the end of 2014. The bank will be engaging with unions on this issue.

Employees who are currently part of AIB’s defined benefit pension scheme will be switched to a defined contribution pension scheme.

It’s thought that the pay of senior managers will be cut by 7.5 per cent from next year, while top executives  - including Duffy – will see a 15 per cent cut in total compensation from this August. Other executives will see a 10 per cent cut in their salaries.

Duffy said that AIB’s cost to income ratio in 2011 was 96.2 per cent, and in the email to staff said that “this level of cost is unsustainable in the current economic environment”. He also said that any “future rewards” for staff would be based on the bank’s ability to pay.

In March it was reported that thousands of AIB staff were having their club memberships paid for by the bank. At the time it was confirmed that around 25 per cent of staff were using the allowance.

From July of this year those subscription allowances will no longer be available to staff. Workers had been entitled to an average gross refund of €560, with a maximum ‘club sub’ allowance of €2,500 a year for senior management.

The Irish Bank Officials Association is set to oppose the plans, according to RTÉ.

Read: 24 AIB employees continue to earn basic salaries over €250k>

March 2012: AIB still paying millions for staff gym and golf club fees>

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Emer McLysaght

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