THE GOVERNMENT HAS told the banks they must cut total remuneration costs to make savings of between 6 per cent to 10 per cent, by reductions in payroll and pension benefits, new working arrangements and structures that deliver efficiency gains.

It comes following the publication of the ‘Mercer Review of Remuneration Practices and Frameworks at the Covered Institutions’.

The Minister for Finance, Michael Noonan, said the remaining covered institutions are “still incurring losses” and that it was “inescapable” not to reduce the cost base of the institutions further. He added:

It can never be forgotten by management and employees of these banks – both past and present – that without enormous cost to Irish taxpayers these institutions would not have survived and that this needs to be borne in mind during future discussions.

The Mercer Review also found that the average amount paid to employees since the end of 2008 had fallen by a range of 6 per cent to 11 per cent at Bank of Ireland, Allied Irish Banks, and Permanent TSB but it had risen 1 per cent at IBRC.

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