The Bank of Ireland has clarified to its employees that the management is not planning to implement a pay cut in order to meet the cost cutting target set by the government for the bank.

The bank is looking to address the huge _1.2 billion deficit in its pension scheme.  The plans could involve staff paying more towards the scheme or accept reduced benefits from the scheme.  The employees currently contribute 2.5 per cent towards the scheme and this might be increased under the new plans to make the scheme sustainable.

The bank indicated that it is already discussion the pension scheme related matters with its employees.  The plans to revive the scheme comes two years after the bank made major changes to the terms of the pension scheme for the employees.  The bank is also offering a voluntary severance programme aimed at reducing the employee remuneration expenses for the bank.

The Bank of Ireland has not confirmed about how many employees are expected to opt for the voluntary severance programme but about 1,200 had taken up the scheme to leave the bank during the second half of 2012.  A total of 5,000 employees have left the bank since 2008 through the scheme the bank had a total of 12,000 employees as of December.