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Statement on pay and bonus policy in BGE or Irish Water

Dublin, 22 January 2014

The Minister for Communications, Energy and Natural Resources, Pat Rabbitte T.D. today said:

I wish to clarify that there is no “bonus culture” in Bord Gáis Éireann (BGE) nor will there be in Irish Water. Nobody employed by Irish Water has received a bonus. There is a pay freeze in BGE until 2016. In 2012, Management and Unions in BGE agreed a radical restructuring of pay policy that:

- Drives efficiencies in the company

- Installed a pay freeze until 2016;

- Abolished increments;

- Terminated legacy allowances and payments of any kind, yielding €2.3 million in savings;

- Delivering total payroll savings of €34 million over four years;

- Closes the defined benefit pension scheme and established a defined contribution scheme for new employees;

- Required all pay ranges to be externally benchmarked;

- Ended fixed pay in favour of introducing an element of pay at risk - in other words a performance related system;

- Ended automatic pay progression (career and pay progression based on performance and market position).

Responsibility for remuneration of CEOs rests with the Minister. Responsibility for the pay system for a commercial state company’s employees is a matter for the Board and CEO of that company. In the case of BGE, the Board and Management have done a particularly good job in overhauling the old pay system and installing a progressive performance related system.

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