Comment from Stephanie Hawthorne, Editor, LexisNexis Pensions World
The news that the former disgraced Royal Bank Chief Executive Sir Fred Goodwin is to receive £16m in pension payments (£693,000 a year) contrasts sharply with the average level of payout by the pensions life boat, the Pension Protection Fund of £4,500 a year. This is the last resort for pensioners whose companies have become insolvent and unable to pay their pensions. "Sir Fred Goodwin should be treated no differently from thousands of other pensioners whose firms are victims of the recession," says Stephanie Hawthorne, editor, LexisNexis Pensions World.
The Royal Bank of Scotland with a pre tax loss for 2008 of £40.6bn would have effectively collapsed had it not been bailed out by the government. Without government aid it would have probably entered the Pension Protection Fund. Here pensions are capped at £27,770.72 a year. This is the maximum pension Sir Fred Goodwin should claim in all justice.
Thousands of pensioners from high profile recession victims Woolworths and Lehman Brothers will be lucky to receive that much. Rewards for failure must go and the banking system must be cleaned up. Unjustified payments to failed executives is no way to restore confidence to the banking system.