7.1. Agency costs

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 This delegation was revoked with effect from 5 August 2011 under S.I. No. 395 of 2011 and since then Agency staff involved in the provision of banking system functions have been seconded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 €394k were incurred in this regard during 2016 (2015: €78k).

7.2. Expenses of the Agency for specified functions

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

7.3. Remuneration and expenses

Agency member fees and expenses

Remuneration of Agency members is determined by the Minister for Finance and is set out below:

¹ Remuneration attached to the position of Chairperson is €45,000 per annum. The Chairperson waived his remuneration for 2016 and 2015.

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 serves in an ex officio capacity as Chief Executive of the Agency. They received no remuneration in respect of their membership.

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

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.

Investment Committee member fees and expenses

Remuneration of Investment Committee members is determined by the Agency with the consent of the Minister for Finance and is set out below:

Remuneration of external members is €20,000 per annum. Brendan McDonagh and Susan Webb, as Agency members, do not receive any additional remuneration in respect of their membership of the Investment Committee. Julie Sinnamon, appointed in her capacity as a public servant, does not receive any remuneration in respect of her membership.

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

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

Chief Executive Remuneration

The remuneration of Conor O'Kelly consisted of basic remuneration and taxable benefits (health insurance). Conor O' Kelly did not receive a discretionary performance related payment in respect of 2016.

Voluntary redundancy scheme

There was no Voluntary Redundancy Scheme ('VRS') in 2016. In 2015, 29 Agency staff participated in a VRS scheme with costs of €1.4m attributable to statutory and redundancy payments.

Garden leave

3 Agency staff were placed on garden leave during 2016 (2015: 3) with an attributable 2016 cost of approximately €0.1m (2015: €0.1m). The average period of garden leave for the 3 staff was 2 months (2015: 2 months). The decision on whether to place these 3 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 2016 retention payments totalling €0.1m were made to three members of staff (2015: €0.1m to four members 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.

7.4. Disclosures in respect of officers assigned to NAMA

Voluntary redundancy scheme

At the reporting date 41 employees assigned to NAMA participated in a VRS (2015: 50 employees). Costs of €3.9m (2015: €3.6m) relating to the VRS have been recognised in 2016. Costs of €1.7m (2015: €1.3m) was attributable to statutory and other redundancy payments, €0.8m (2015: €1.0m) related to the "retention scheme"1, and €1.4m (2015: €1.3m) for garden leave.

¹ 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.

Garden leave

41 employees assigned to NAMA were placed on garden leave during 2016 (2015: 50) 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 under the VRS for 39 staff was 3 months (2015: 3 months) and for 2 staff was 6 months. In addition to those accepted for the VRS, 7 staff (2015: 15) were placed on garden leave during 2016 with an attributable 2016 cost of approximately €0.2m (2015: €0.3m). The average period of garden leave for the 7 staff was 2 months (2015: 2 months). The decision on whether to place these 7 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.

7.5. 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 in 2016, the Agency contribution was maintained at 14.2% (2015: 14.2%) of salary in respect of members of the Scheme. Contributions to the defined benefit scheme by the Agency for the year ended 31 December 2016 amounted to €9.1m (2015: €8.5m).

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 €26k (2015: €36k) to PRSAs for a number of employees who are not members of the defined benefit scheme in 2016.

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