59. Deputy Michael McGrath asked the Minister for Finance if he will show separately in respect of the CEO of the National Treasury Management Agency and the CEO of the National Assets Management Agency, an estimate of the State’s pension contribution and the estimated value of each of their pension fund if they were employed to retirement age on present salary; if the pension due to be paid is based on final pensionable salary before or after the voluntary pay cut. (Question 53438/12 asked on 29 Nov 2012)

Minister for Finance (Deputy Michael Noonan): The Chief Executives of the NTMA and NAMA are members of the NTMA defined benefit superannuation scheme. Pension benefits for those who were members of the scheme prior to 1 January 2010 are based on final salary. The pension benefits of members who joined the scheme on or after 1 January 2010 are based on career average earnings. Unlike most public pension schemes which are funded on a pay as you go basis, the NTMA superannuation scheme is a funded scheme. The NTMA contribution to the scheme is determined on the advice of an independent actuary and is at present set at a level of 25% of payroll in respect of members prior to 1 January 2010 and 10.5% of payroll in respect of members who joined the scheme on or after 1 January 2010. Pension entitlements are within the standard entitlements in the model public sector defined benefit superannuation scheme. Pension contributions are not paid to individual employees – they are paid into the scheme. The level of potential pension payments to members is dependent on length of service, based on final salary or career average earnings, with 1/80th of salary accruing for each year of service.

In relation to the pension entitlements of the Chief Executive of the NTMA, his contract provides that his pension will be based not on his salary as Chief Executive but on his salary as a director of the NTMA prior to his appointment as Chief Executive.

The pension of the Chief Executive of NAMA will ultimately be based on a pro-rata average of his final salary as NAMA Chief Executive and his final salary as an employee of the NTMA. He was appointed to the position of Chief Executive of NAMA on 22 December 2009 and his contract as NAMA Chief Executive is a specified purpose contract, linked to the lifespan of NAMA.

The Chief Executives of NTMA and NAMA have waived 15% of salary through the gifting of a proportion of salary to the Exchequer under Section 483 of the Taxes Consolidation Act 1997. Gifting of a proportion of salary to the Exchequer under this provision does not affect the calculation of pension benefits.

The salary of the Chief Executive of NTMA for 2011 was €490,000 before the voluntary reduction. The salary of the Chief Executive of NAMA for 2011 was €430,000 before the voluntary reduction. The public service Pension-Related Deduction is applied to the Chief Executives of the NTMA and NAMA.