8.1 Agency costs

	Note	2015 €'000	2014 €'000
Staff Costs
Employment costs		82,920	72,564
Defined benefit pension scheme current service change	10.5	15,737	9,309
PRSA pension cost	8.4	36	46
		98,693	81,919
Other operating expenses
Other operating expenses		12,349	13,781
Professional fees		3,966	3,829
Depreciation	11	1,707	1,405
		18,022	19,015
Net interest expense	10.5	475	368
Total Agency costs		117,190	101,302

Employment costs include remuneration and other staff related costs. Other operating expenses include technology costs, occupancy costs, business services costs and staff travel expenses.

Under the direction issued to the Agency under Statutory Instrument (S.I.). No. 115 of 2010, the Minister for Finance delegated a number of banking system functions to the Agency. This delegation was revoked with effect from 5 August 2011 under S.I. No. 395 of 2011 and since then Agency staff involved in the provision of banking system functions have been seconded to the Department of Finance. At the direction of the Minister, the related staff and professional advisor costs incurred continue to be met by the Agency. Professional advisor costs of €78k were incurred in this regard during 2015 (2014: nil).

8.2 Expenses of the Agency for specified functions

	Note	2015 €'000
State Claims Agency		15,674
Funding and Debt Management		10,132
National Development Finance Agency		9,149
Ireland Strategic Investment Fund	6	8,686
NewERA		6,233
		49,874
National Asset Management Agency	6	53,495
Strategic Banking Corporation of Ireland	6	3,634
Banking Unit		2,426
Pension adjustment*		7,761
		67,316
Total Expenses		117,190

* The pension adjustment is the difference between the provision for pension costs in the Income and Expenditure Account and the actual pension contributions made.

8.3 Remuneration and expenses

Agency member fees and expenses

The Agency members were appointed on 22 December 2014. Remuneration of Agency members is determined by the Minister for Finance and is set out below:

Each appointed member also received an additional €54 remuneration in 2015 in respect of amounts under paid in 2014.

Remuneration attached to the position of Chairperson is €45,000 per annum and €30,000 for other Appointed Members. The Chairperson of the Agency (Willie Walsh) waived his remuneration for 2015 and 2014.

Derek Moran and Robert Watt serve on the Agency in an ex officio capacity as Secretary General of the Department of Finance and the Department of Public Expenditure and Reform respectively. Conor O'Kelly (appointed from 5 January 2015) serves and John Corrigan (retired 4 January 2015) served in an ex officio capacity as Chief Executive of the Agency. They received no remuneration in respect of their membership.

Agency member expenses

Expenses incurred in respect of Agency members are set out below:

¹ Brendan McDonagh lives in Bermuda.

Agency members are reimbursed approved expenses on a vouched basis. Expenses relate to travel and accommodation costs to attend Agency meetings in the Agency's offices in Dublin. The 2015 tax payable by the Agency to the Revenue Commissioners in relation to the reimbursed expenses for Agency members is €20,791 (2014: nil).

Investment Committee member fees and expenses

The Investment Committee members were appointed on 27 February 2015. Remuneration of Investment Committee members is determined by the Minister for Finance and is set out below:

Investment Committee member fees	2015 €
Richard Leonard	16,750
John Herlihy	16,750
Julie Sinnamon2	-
Investment committee fees	33,500

Remuneration of external members is €20,000 per annum.

² Julie Sinnamon, appointed in her capacity as a public servant, did not receive any remuneration in respect of her membership.

Investment Committee member expenses

Expenses incurred in respect of Investment Committee members are set out below:

Investment Committee member	Travel €	Accomodation and related expenses €	Total 2015 €
Richard Leonard	1,447	1,017	2,464
John Herlihy	-	-	-
Julie Sinnamon	-	-	-
Investment Committee Expenses	1,447	1,017	2,464

Investment Committee members are reimbursed approved expenses on a vouched basis. Expenses relate to travel and accommodation costs to attend Investment Committee meetings in the Agency's offices in Dublin. The 2015 tax payable by the Agency to the Revenue Commissioners in relation to the reimbursed expenses for Investment Committee members is €1,821 (2014: nil).

Chief Executive Remuneration

Conor O'Kelly (Appointed 5 January 2015)	2015 €	2014 €
Salary	476,364	-
Taxable benefits	2,183	-
John Corrigan (Retired 4 January 2015)	2015 €	2014 €
Salary	18,705	416,500
Taxable benefits	248	29,075

The remuneration of Conor O'Kelly consisted of basic remuneration and taxable benefits (health insurance). The Agency makes a contribution of 18% of salary to a pension arrangement in respect of Conor O'Kelly. Conor O' Kelly did not receive a discretionary performance related payment in respect of 2015.

John Corrigan's pension entitlements are within the standard entitlements in the model public sector defined benefit superannuation scheme.

The remuneration of John Corrigan consisted of basic remuneration, taxable benefits (car and health insurance) and a performance related payment of up to 80 per cent of annual salary. John Corrigan waived any consideration for performance related pay in respect of 2014 and 2015.

Voluntary redundancy scheme

At the reporting date 79 employees (inclusive of 50 staff assigned to NAMA) participated in a Voluntary Redundancy Scheme ('VRS'). Costs of €5.0m relating to the VRS have been recognised in 2015, of which €3.6m relate to NAMA. In relation to the NAMA VRS, €1.3m was attributable to statutory and other redundancy payments, €1.0m related to the "retention scheme" ³, and €1.3m for garden leave. The €1.4m for the remainder of NTMA staff was attributable to statutory and other redundancy payments. There was no VRS in 2014.

Garden leave

50 Agency staff (relating to staff assigned to NAMA) were placed on garden leave during 2015 as part of the VRS. This does not represent an incremental cost for the Agency but instead forms part of the overall Agency salary cost that would have been incurred regardless of the decision to place the relevant staff on garden leave. The average period of garden leave for the 50 staff, under the VRS, was 3 months.

In addition to those accepted for the VRS, 18 staff (2014: 18) were placed on garden leave during 2015 with an attributable 2015 cost of approximately €0.4m (2014: €0.4m). Of the 18 staff placed on garden leave, 15 related to staff assigned to NAMA (2014: 17). The average period of garden leave for the 18 staff was 2 months (2014: 2 months). The decision on whether to place these 18 staff members on garden leave was made on a case-by-case basis and included consideration, inter alia, of the person’s role within the Agency and the person’s new employer.

Other Staff Costs

In 2015 the NTMA made retention payments totalling €120,000 to four members of staff (2014: €60,000 to 1 member of staff). These payments were made on a limited and exceptional basis in order to retain the expertise and experience of key staff in critical business areas. The practice of entering into employment contracts providing for retention payments has been discontinued. No retention arrangement has been entered into since mid 2014 and such arrangements do not extend beyond 2017. ³

³ The retention scheme only applies in circumstances where staff members are made redundant, have met all required performances standards, and have remained with NAMA for the period required to fulfil the NAMA’s statutory mandate.

8.4 Superannuation

Superannuation entitlements of staff are conferred under a defined benefit superannuation scheme established under section 8 of the National Treasury Management Agency Act, 1990. Contributions are transferred to an externally managed fund. The Agency contribution is determined on the advice of an independent actuary. Following an actuarial review at the end of 2013, the Agency contribution was set at a level of 14.2% per cent of salary in respect of members of the Scheme. Contributions to the defined benefit scheme by the Agency for the year ended 31 December 2015 amounted to €8.5m (2014: €8.6m).

Liabilities arising under the defined benefit scheme are provided for under the above arrangements, except for entitlements arising in respect of the service of certain members of the Agency’s staff recruited from other areas of the public sector. On 7 April 1997 the Minister for Finance designated the Agency as an approved organisation for the purposes of the Public Sector (Transfer of Service) Scheme. This designation provides for, inter alia, contributions to be paid out of the Exchequer, as and when benefits fall due for payment in the normal course, in respect of prior service of former public servants employed by the Agency. No provision has been made for funding the payment of such entitlements.

The Agency also contributed €36k (2014: €46k) to PRSAs for a number of employees who are not members of the defined benefit scheme in 2015.