The financial services watchdog will be paying €1.2 million by the end of the year to “experienced” officials as part of an early voluntary retirement scheme, Times of Malta is informed.

The disbursement of the funds was approved by the Malta Financial Services Authority’s board of governors, industry sources said.

The regulator, they added, was also mulling the possibility of pumping additional hundreds of thousands of euros into the early voluntary retirement scheme to create more vacancies at its top echelons.

A spokesman for the MFSA confirmed to the newspaper that a new early retirement scheme was offered to some members of the top management.

This followed a change at the very top, when Joe Bannister asked not to be reappointed chairman and was succeeded by Joseph Cuschieri, who headed the Malta Gaming Authority before.

No details were given about the senior MFSA officials who took up the offer or how much they received as the spokesman would only say that, so far, 10 staff members would be retiring.

MFSA sources told Times of Malta that, apart from the head of enforcement, Anton Bartolo, who was told “in diplomatic terms” he was not welcome any longer, the head of insurance and pensions supervision, Marisa Attard, the director of human resources, George Spiteri, and the head of the banking supervision unit, Ray Vella, were also politely shown the door.

“All of these heads, by far the most experienced in the organisation, were not really given an option to stay even though the scheme is termed voluntary. They were offered money and asked to leave,” the sources said.

In the meantime, Mr Cuschieri set up a new executive team, consisting of chief officers, concentrating all ‘power’ in an executive committee headed by himself as CEO.

One of Mr Cuschieri’s closest aides at the Malta Gaming Authority has already been engaged as his second in command at the MFSA. The new chief officers are also known to be close collaborators of Mr Cuschieri.

Asked to give details of the financial package awarded to the new chief officers, the MFSA spokesman refused, citing “data protection” rules.

However, the newspaper is informed that while Mr Cuschieri receives over €11,500 a month, the amount increasing substantially over the next few years, his chief officers get close to €100,000 annually.

The MFSA spokesman said the early retirement scheme was open to officers with either a minimum of 25 years’ experience or who were within six calendar years away from normal retirement.

Without giving details of the sums paid so far, he said the payments consisted of either a lump sum equivalent to up to two-thirds of their annual salary until the date of their reaching retirement age or three times the employee’s terminal annual salary.

In some cases, those asked to leave will be receiving more than €150,000 each with the right to find another job even in the same industry, the sources said.

The ‘offloading’ of experienced staff coincides with a range of calls for applications for the recruitment of tens of new officials. A few days ago, Mr Cuschieri announced the MFSA planned to increase its staff to about 450 in the coming years, up from 350. This is expected to raise the MFSA’s wage bill by several millions of euros in the process.

The financial services regulator has come under intense pressure over recent years, particularly from the European Commission and the International Monetary Fund, in the wake of alleged money laundering breaches by some of its licensees, including Pilatus Bank and Satabank.