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Paul Kiely told the PAC that he resigned from the board of the CRC in recent weeks Screengrab via Oireachtas TV

'Absolute madness': CRC pays Mater Hospital €660k to administer 'phantom pension fund'

The revelation was disclosed right at the end of lengthy hearings before the Dáil’s Public Accounts Committee this afternoon.

Updated 20:14

THE CENTRAL REMEDIAL Clinic (CRC) pays the Mater Hospital around €660,000 to administer a pension fund that does not exist, the Dáil’s Public Accounts Committee has heard.

Towards the end of an extraordinary nearly six hours of hearings on the recent scandal surrounding the CRC, its former chief executive Paul Kiely claimed that the Mater Hospital charges the clinic for administering a non-existent pension fund.

He explained that the CRC pays the Mater a premium between 10 and 13 per cent of employees’ gross salaries every year for the public hospital to administer a Voluntary Hospitals Superannuated Scheme or VHSS pension scheme.

Kiely also claimed that he has been told in correspondence that the CRC is not the only organisation that the Mater does this for.

“They [the Mater] charge us that for administering the fund on behalf of the members,” he said, but added “there’s no fund that I know of” to the astonishment of members.

Ross, who initially raised the issue of the CRC’s relationship with the Mater, said the public hospital was essentially “charging €660,000 for administering a phantom fund”.

Kiely told the PAC that he raised the issue with the CRC board, saying “It was kicked out of the water. I was told it is what it is and that’s the way it’s to stay.”

Ross (below) described the claims as “outrageous” and said it was “absolute madness”.


‘Not the only organisation’

The independent TD for Dublin South said: “So they get €660,000 for administering a fund that doesn’t exist?” to which Kiely responded “Yes”.

“I tried to break it on numerous occasions and no one wanted to know. The Department of Health didn’t want to know,” Kiely claimed.

Kiely, who resigned from the CRC last year and said today he has resigned from the board in recent weeks, added that he was told it was a “legal agreement that went back 30-odd years ago”.

Ross said the arrangement would have meant that the CRC would have paid the Mater “millions” down through the years.

Kiely tried to explain how the money would circulate as the Mater would receive money which “becomes part of their income for the year, so it lessens the amount the HSE have to give them” and would therefore increase the amount the HSE owed to the CRC.

But he said “it was just daft” adding that he tried to get the clinic registered so as that it could administer the VHSS pension scheme itself, but he was unable to do so.

He also alleged that in correspondence from the Mater he learned that the CRC is not the only organisation the hospital does this for.

“I do know in correspondence with the Mater I was told that we aren’t the only organisation we were doing this for,” he claimed.

The HSE’s head of human resources, Barry O’Brien, said he had no idea about the arrangement Kiely spoke of and said the Executive “does the work on the administering of the funds centrally”.

He said that as the revelations have “only come to light in the last five minutes” he would need time to assess the issue and promised a report on the VHSS scheme for the committee by next week.

Committee chairman John McGuinness described the revelations as an “absolute farce”.

He said it is an issue that the committee will return to at the beginning of hearings next week, where someone from the Mater hospital will be asked to appear before TDs.

- additional reporting from Michelle Hennessy

Originally published 16:24

Read: Mater Hospital ‘refutes’ suggestions of operating a CRC ‘phantom fund’ >

Video: Former CRC chief got €200k lump-sum payment from charity fund

More: CRC ‘contractually bound’ to top up salaries

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