Michael Falzon gets €260,000 retirement package from Bank of Valletta

Parliamentary secretary Michael Falzon was paid a handsome early retirement package of €260,000 by Bank of Valletta, his ministerial declaration of assets has revealed.

Falzon, 54, joined state-owned BOV as a clerk in 1979 and went on to become executive head of the bank’s legal office.

BOV told MaltaToday on Friday morning that it has had an early retirement scheme since 2005. "While the Bank cannot comment on individual cases, the scheme allows employees aged over 50 years to request retirement on various grounds, including health, or on appointment to a senior public post. In the latter case, the employee retains the right to return to his or her employment upon termination of the appointment. In such cases the employee is obliged to return retirement benefits received on a pro rata basis."

Bank of Valletta told this newspaper that the amount of retirement benefits paid is not fixed, but is a multiple of the employee’s salary which depends on the age of the employee, years left to pensionable age, and years of service at the bank. "The conditions linked to early retirement are and always were at the discretion of the Bank's management," BOV said.

In the last five years, 117 employees were granted early retirement.

Falzon was appointed parliamentary secretary for lands under Prime Minister Joseph Muscat in April 2014, when his predecessor Michael Farrugia was made social policy minister.

Falzon is currently under pressure over having rubber-stamped a controversial €1.65 million expropration for the 50% ownership of government offices housed in an Old Mint Street building in Valletta, to company owner Mark Gaffarena. Falzon has denied claims that the property was over-valued by architects or that he interfered in the amount payable to Gaffarena, whom he personally knows.

This newspaper is also informed that a member of his staff, former presidential aide Richard Dimech, 60, has also been granted a similar retirement package just two years from his retirement. Dimech was executive head of BOV’s business centre and Valletta branch, while seconded to the office of President George Abela as his personal secretary between 2008 and 2013.

BOV did not comment on this specific case.

The government is the largest shareholder in Bank of Valletta, with 25.2% ownership and the right to appoint its chairman. UniCredit S.p.A. is the other major shareholder with a 14.45% stake in BOV.

In a first reaction, Alternattiva Demokratika chairperson Arnold Cassola sarcastically commented that he was "so proud" of being a shareholder "of such a generous bank".

"BOV loaned €110 million to Gasan, Tumas, Siemens and co. for the new power station. Rather than guaranteeing for the loan with their own assets, us BOV shareholders are guaranteeing €88 million of this loan as taxpayers, since the Maltese government is guaranteeing the loan. Now Michael Falzon was paid a handsome early retirement package of €260,000. I am so proud of being shareholder of such a generous bank."