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| Goodwin's pension to be reduced | Goodwin's pension to be reduced |
| (20 minutes later) | |
| Former Royal Bank of Scotland chief executive Sir Fred Goodwin has offered to reduce his highly controversial pension by £200,000 a year. | Former Royal Bank of Scotland chief executive Sir Fred Goodwin has offered to reduce his highly controversial pension by £200,000 a year. |
| He has already reduced his £703,000 pension by taking a lump sum of £2.7m. If his offer is accepted he will receive £342,000 a year. | He has already reduced his £703,000 pension by taking a lump sum of £2.7m. If his offer is accepted he will receive £342,000 a year. |
| The offer to cut his pension came after a threat of legal action from RBS. | The offer to cut his pension came after a threat of legal action from RBS. |
| BBC business editor Robert Peston understands the bank and the government will accept Sir Fred Goodwin's offer. | BBC business editor Robert Peston understands the bank and the government will accept Sir Fred Goodwin's offer. |
| The government has a say in the decision because it owns 70% of RBS as a result of a £20bn bail-out. | The government has a say in the decision because it owns 70% of RBS as a result of a £20bn bail-out. |
| Early pension | Early pension |
| There may still be criticism of the deal because it will leave Sir Fred with a bigger pension than he would have received if he had been dismissed instead of leaving on agreed terms. | There may still be criticism of the deal because it will leave Sir Fred with a bigger pension than he would have received if he had been dismissed instead of leaving on agreed terms. |
| SIR FRED'S PENSION POT October 2008: Pension pot of £16.6m = £703,000 a yearEarly 2009: Takes a tax-free lump sum of £2.7mJune 2009: Offers to give back £4.5mPot now worth about £9m = £342,000 a year Read Robert Peston's blog | |
| Sir Fred did a deal with the bank in October 2008 that allowed him to take his full pension of £703,000 a year at the age of 50 without having to take a reduced rate for claiming it early. | Sir Fred did a deal with the bank in October 2008 that allowed him to take his full pension of £703,000 a year at the age of 50 without having to take a reduced rate for claiming it early. |
| RBS almost collapsed while Sir Fred was in charge of it as a result of a combination of the credit crunch, bad debts and the weight of the debt from RBS's acquisition of Dutch bank ABN Amro. | RBS almost collapsed while Sir Fred was in charge of it as a result of a combination of the credit crunch, bad debts and the weight of the debt from RBS's acquisition of Dutch bank ABN Amro. |
| The City minister Lord Myners has been criticised for not making sure that Sir Fred did not receive rewards for his failure. | The City minister Lord Myners has been criticised for not making sure that Sir Fred did not receive rewards for his failure. |
| The House of Commons Treasury Committee said Lord Myners should not have allowed the RBS board to conduct the negotiations by itself. | The House of Commons Treasury Committee said Lord Myners should not have allowed the RBS board to conduct the negotiations by itself. |
| 'Small gesture' | |
| Sir Fred's deal with the RBS board doubled the value of his pension pot from £8m to £16.6m. | Sir Fred's deal with the RBS board doubled the value of his pension pot from £8m to £16.6m. |
| The reduction he is offering would cut the value of the fund by about £4.5m, which means he is offering to return about half of the increase. | The reduction he is offering would cut the value of the fund by about £4.5m, which means he is offering to return about half of the increase. |
| Rob MacGregor from the Unite union described the offer as a "small gesture". | |
| "This decision to repay some of the massive pension pot he has taken will do nothing for the thousands of staff who have already lost their jobs within RBS." | |
| "Also, many thousands more employees face an uncertain future, while the person whose misjudgement and greed caused their misery enjoys a life of luxury." | |
| RBS announced 9,000 job cuts in April, having made a loss of £24.1bn in 2008 - the largest loss in UK corporate history. |