Golden handshakes of up to €500,000 and topped-up pensions for the country's most senior civil and public servants are among a list of exchequer costs up for review by the Department of Finance.

"Everything is under consideration, including pensions," a department spokes­man said last week.

Generous severance arrangements introduced almost 20 years ago provide that heads of government departments or secretaries general and county managers are paid a severance lump sum of two years' pay if they retire when they complete their seven-year contract.

A secretary general's salary is around €225,000 a year so a two-year golden handshake, together with other smaller payments, would bring it to around €500,000.

In addition, those who opt to leave after their contract is up will get an additional 10 years' service added to their pension entitlement.

In virtually all cases, the extra service added would give the retiring secretary-general a full, immediate pension of around €120,000 a year irrespective of age, as well as his or her €500,000 handshake.

The deal to limit secretary general contracts to seven years was introduced to shake up the top jobs in the civil service and allow fresh blood to rise. The very generous severance arrangements are regarded as compensation for having to leave the position after such a relatively short period of time.

The deal was introduced for the country's most senior civil servants in the early 1990s. The retiring secretary general also has the option to stay on in the civil service in a different role.

But the salary of this new role and the pension cannot exceed what he or she received while heading up the department.

In most cases, however, secretaries general leave the service and take up lucrative consultancy contracts in the private sector where the experience and expertise of a head of a government department is eagerly sought after.