The Irish Bank Officials Association has strongly criticised the Bank of Ireland's decision to scrap its defined benefit pension scheme for new staff members, saying it is "fiscally reckless and morally reprehensible".

IBOA general secretary, Larry Broderick, said the bank's plans to opt for a "convoluted" scheme instead of the defined benefit scheme that applies for existing staff would deliver a substantially reduced pension for new employees.

"This decision flies in the face of all logic on the pension issue at a time when the Government and the Pensions Board are increasingly concerned about pension provision into the future and are, ironically, engaged in a massive pensions promotion campaign" Mr Broderick said yesterday.

Bank of Ireland angrily rejected the IBOA's criticism describing its new arrangements as "progressive, responsible and providing long-term security for employees and the pension fund".

In a statement the bank said the new scheme aimed to ensure it was managed efficiently and could ultimately bring greater consistency in pension coverage across the group.

"The new scheme is a new type of pension that is designed to support the bank's objective of attracting and retaining high-calibre employees and minimising the excessive volatility currently experienced in defined benefit schemes", the statement said. It added that the scheme was neither a defined benefit or defined contribution scheme, but comprises elements of both.

Mr Broderick said Bank of Ireland's staff, who are members of the IBOA, will be astounded by its decision especially since they have up until now co-operated with their cost cutting programme that has led to the loss of over 1,000 jobs in the past year. He also noted that Bank of Ireland is due to announce profits of up to €1.3 billion next week.

Bank of Ireland said it would be the first of the Irish banks to introduce such a scheme in Ireland. An industrial relations tribunal recently issues recommendations for AIB to extend a defined benefit pension scheme to all of its staff members following an IBOA claim.