herald

Monday 20 August 2018

YOU'VE NEVER HEARD OF HIM - BUt this ex-civil servant is costing you €700k this year

Dan White on the costly retirement of fatcat Mandarin Dermot McCarthy

Honestly, you couldn't make it up.

Dermot McCarthy who, as secretary general to the government and the Department of the Taoiseach, was our top civil servant.

When he retired this summer he received a standard gratuity of €428,000 plus a special top-up of €142,000.

McCarthy will also receive an annual pension of €142,000 bringing the total pay-out in his first year of retirement to a truly enormous €713,000.

Yep, that's right folks.

McCarthy, who as the country's top civil servant presided over such "achievements" as social partnership, the bank guarantee, the explosion in wasteful public spending, and the EU/IMF bailout, rides off into the sunset with a lump sum of €570,000 and a guaranteed pension of €2,730 per week for the rest of his days.



scandalous

Meanwhile those of us who were on the receiving end of his "achievements" can look forward to a future of higher taxes, unemployment, negative equity and emigration.

The scandalous McCarthy payouts are being replicated right across the upper echelons of the public sector as more and more fat cats retire before next February's deadline.

Anyone retiring from the public sector before the end of February 2012 will have their pension calculated on the basis of their final earnings before recent pay cuts.

McCarthy was one of the beneficiaries of this loophole.

His pension is based on the €284,000 per year he was paid before the cuts came into force rather than the €200,000 he was actually being paid at the time of his retirement.

Anyone retiring after the end of next February will have their pension calculated on the basis of their average career earnings, still much more generous than most of us in the private sector can look forward to but considerably less than senior bureaucrats have grown used to in recent years.

The Government hopes to use the November pension deadline as a carrot to persuade several thousand older public sector workers to retire.

This will allow it to meet its target, which it agreed with the EU and the IMF at the time of last November's bailout, to cut public sector numbers by 25,000 by 2014.

This, in turn, is creating its own problems.

This summer several hundred experienced teachers retired early in order to benefit from the old, higher pension rates. Many more will go within months, leaving pupils without teachers in the middle of the academic year.

Garda representatives have also been vocal in their criticism of how these early retirements will work in practice, pointing out that they could leave up to 10pc of stations unmanned.

But there is a bigger problem.

With anyone who retires before the end of February set to receive half of their original, ie. higher, salary, the savings which will be generated by reducing public sector numbers will be minimal. And that is before taking into account the cost of the lump sums.



bulk

Even based on the average public sector pay levels of €50,000, 10,000 retirements by the end of February 2011 would trigger €750m of lump sum payments, the vast bulk of tax free.

That means it will take many years before the cut public sector numbers will generate any meaningful savings for the exchequer.

Do we need any further evidence that this crazy system is badly in need of reform?

Until it is though, McCarthy and many of his former colleagues will be laughing all the way to the bank.

And what about us private sector workers? We poor saps will, as usual, end up footing the bill.

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