Goodwin's tax break
The latest nugget about Sir Fred's oh-so-lovely pension arrangements are that he has taken a £2.7m cash lump sum from his pension pot.
This is worth £4.5m to him, because RBS is paying its former chief executive's £1.8m tax liability on it.
For the avoidance of doubt, however, the lump-sum payment reduces his annual pension income - from £703,000 a year to £555,000.
However Sir Fred's decision to take the lump sum forces yet another cost on a bank that is somewhat short of the readies.
So it has asked Sir Fred to pay back the lump sum and revert to taking his £703,000 a year.
Sir Fred has agreed to do this, so long as he can get an assurance from Her Majesty's Revenue and Customs that the tax man won't come after him for the £1.8m in tax that would - in theory - still be due on the £2.7m payment, even if the money has been handed back.
What a palaver.
If you were to find this to-ing and fro-ing rather unseemly, you would probably not be alone.
After all, Sir Fred took Royal Bank to the brink of collapse. It wouldn't be alive today if we as taxpayers hadn't propped it up.
So it's not surprising that the City Minister, Lord Myners, today told MPs that the Royal Bank of Scotland continues to explore whether the battered bank in some way broke the law in agreeing to pay the supercharged pension to Sir Fred Goodwin.
What Myners didn't say is that there's something of a punch-up over this between two of the City's biggest law firms, Linklaters and Slaughter & May.
Slaughter, which is advising Myners and the Treasury, believe there may be a legal route to reduce the pension.
Linklaters, which is RBS's solicitors, believe there isn't a cat's chance in hell of retrieving a penny.
So RBS is taking the advice of leading counsel on whether its board somehow failed to follow all the proper procedures in the way it agreed the generous terms of Sir Fred's departure (and see my note "Clawing back Sir Fred's pension" for more on all this).
RBS really can't do otherwise, given the outrage that Sir Fred's pension has generated among its customers and shareholders.
But some argue that Lord Myners' vigorous pursuit of Sir Fred is a case of stable doors and bolting horses.
I remain slightly puzzled by why Lord Myners - who's probably the least naïve business person I know and who was advised by Slaughter at the time - didn't investigate more deeply the terms of Sir Fred's departure, before it was too late to change them.
I'm 
© MMIX~RS~q~RS~~RS~z~RS~30~RS~)
Comments
Sign in or register to comment.
This has turned into yet another circus in which the taxpayer will end up paying yet more expensive bills.
When will it dawn on the great and good that we can no longer afford this type of entertainment?
All I know is that Goodwin got away with it and they let him. It's a disgrace but when in a hole stop digging. Just move on!
Complain about this comment
He's not daft. Probably thinks it is safer to pull his money, buy gold and bury it on a beach in the caribbean where its safe from the taxman and money printers.
Complain about this comment
Oh dear. You write an article on behalf of ???? to try and improve the press on the bankers.
And then a few minutes later this comes out ...
Bad day at the office ?
Complain about this comment
Once again the ones making the real money will be the lawyers.
When will central government employ the right people to ask the right astute questions at the right time? Can you imagine a business going back to a supplier and saying 'sorry we paid you too much for that'?
Still I find it hard to concieve of a business that pays bonuses regardless of if it has made money. For most mortals it is a way of sharing the cream after a good year.
Complain about this comment
"I remain slightly puzzled by why Lord Myners - who's probably the least naïve business person I know and who was advised by Slaughter at the time - didn't investigate more deeply the terms of Sir Fred's departure, before it was too late to change them."
Because he along with the department he works for is not fit for purpose Robert. Its hardly rocket science
Complain about this comment
http://news.bbc.co.uk/1/hi/business/7947844.stm
So is it 2.7 or 3 Million Robert
Complain about this comment
Oh yeah - and there's a surprise - a bunch of lawyers saying they have a good case to take legal action.
Call me cynical ...
Complain about this comment
Robert you say: After all, Sir Fred took Royal Bank to the brink of collapse.
I have no axe to grind for Fred the Shred but do you not think there is something sinister and positively indecent about the way in which he has been deliberately isolated and set up by the government to be vilified as the villain of the banking piece ? And aren't you joining in with remarks like that ?
First, Goodwin was one member of a board of directors whose members were judged to be high calibre with a long pedigree of business success. He did not act alone.Every significant decision was backed by the Board - wasn't it?
Second, hardly any bank of any size in the world was not hit to the tune of £ billions by the credit crunch and its aftermath. RBS is just one of many banks affected - isn't it?
Third,the seed of the problem which has hit the global banking system was sown by the top people in the global banking community. They came up with a scenario which they said would make the banking system more stable and reduce the risk of banking failures. This was promoted by the International Banking Federation and endorsed by the IMF.
It had precisely the opposite effect to that envisaged. It paved the way for ‘off the books” SIVs etc which not only laid the foundation for a destabilised banking system with risk distributed in such way that nobody had any confidence in anything when the bubble burst, but also encouraged more risky behaviour by individual banks and made regulation more difficult.
Fourth, we have the behaviour of our government in contrast to its stance now, complete with heavy re-writing of history. Gordon Brown’s Mansion House speech of 2006 did not see him castigating bankers for their irresponsible behaviour but lauding their dynamism innovative products etc. He did not call for tougher regulation but boasted of the part played by the government in continuing with light touch regulation in the face of suggestion to beef it up. He did not call for effective cross-border regulation but stressed that he has resisted calls for a single EU regulator and would continue to do so. And we now know from the head of FSA that the pressure on them was to not get too heavy with the banks.
We did not have Gordon seeking to dampen down the risky behaviour of banks, businesses and individuals but encouraging it by assuring us repeatedly “No more boom and bust”, not too mention setting an example by running up public spending like there was no (bust) tomorrow – including his expansion of “off the books” PFI spending.
We did not have Gordon condemning huge earnings and bonuses in the City –merely lapping up the tax revenues. Fred Goodwin was not a source of worry or criticism – more a regular presence in Downing Street, at Chequers and at the head of Government Task Forces, not to mention collecting a knighthood.
Maybe Goodwin should be in the dock, for his part in what has happened to the banks and the economy but, if so, he should have plenty of company. Gordon should not acting as prosecutor in chief or even juror but as a fellow accused.
To see an individual deliberately served up to be vilified (and his family exposed) all timed so as to divert the headlines from the extra billions being thrown at the banks and the critical comments of the Government from the FSA, the National Audit Office and the B of E was sinister and positively indecent - don't you think ?
Complain about this comment
Perhaps he's taking the money while he can spend it.
Some ominous noises are coming out of the US about law suits by shareholdes and such like that could make Fred's payoff look like a pittance.
The lawyers seem very confident and if they win the first one against Fred and the Board of RBS how many more will there be and what will be the cost to the taxpayers once again?
Will there be a rush by the government to nationalise the banks before this happens?
Complain about this comment
WHAT exactly was Myners there for - has he got a mouth?? - a brain?? - can he not ask relevant questions - eg what about his pension, how much is he getting. WHAT a farce and Myners is a close adviser of the PM - seems there is a real link as to how UK is in a depression if these two were deciding / making up fiscal policy.
WHAT was Myners task in the debacle and what did he do - or more to the point - what did he not do????????
Complain about this comment
[Unsuitable/Broken URL removed by Moderator][Unsuitable/Broken URL removed by Moderator]So the witch hunt over Sir Fred Goodwins pension continues. And if the stable door was bolted long ago the blame game will run on and on. No surprise really. Since the credit crunch began, blame has been a central theme with the finger pointed at virtually everyone in the economic cycle from governments to bankers and consumers. With the G20 approaching it is time for unified action. A more positive and resilient economic mindset is required. To build a brighter future see [Unsuitable/Broken URL removed by Moderator]
Complain about this comment
This should not be the only legal redress that Sir Fred should be worried about...
'Council pension funds suing RBS!'
http://news.bbc.co.uk/1/hi/business/7946124.stm
On Radio 4 yesterday evening the US lawyer who is taking on this case, on behalf of the UK councils, stated that should a crime be proven, then the US legal system has the power to demand a portion of a chief exective's personal assets. This personal fine can be 'above and beyond' any punative fines covered by an executive's company indemnity insurance scheme. He gave an example of a 30 million dollar fine legal ruling against an executive, that was covered by insurance, being followed by a 5 million dollar fine against the executive payable from his own personal assets.
The US lawyer didn't say what his percentage fees were...but he sounded very determined!
Complain about this comment
So we have:
Linklater's, advising Government-owned-RBS, and charging them up to £900/hour
arguing with
Slaughter & May, advising the Government, and charging them up to £900/hour,
!!!??!!??!!
These two legal firms, between them, are likely (after all their senior legal opinion) to bill how much for this ? Up to £1/2 million ? Up to 1 million ? Much more ?
So we the tax payer are paying these city lawyers huge sums to sue us.
At least some rich lawyers will still have fortunes to be able to afford a loaf of bread in a couple of years, when Sterling is worthless and taxes for the common man are at painful levels.
And this rip off is actually only a minor rip off compared to some other current ones !!??!!
Complain about this comment
Risk, risk, risk. That's all I hear on thsi blog.
Well specially for you Robert, the definition of risk: expose to a chance of loss or damage
And risk management: Risk management is a structured approach to managing uncertainty related to a threat
Now neither of these definitions indicates that risk can be totally avoided or even indicates that risk management suddenly means you cannot lose money.
Taking financial risk is necessary to earn a financial reward. Do I really need to take you through this Robert, business editor of the BBC?
What I'm trying to say is that risk management is not a magical event that means finacnial insitutions will never lose money. It means they try to minimise it anmd avoid as much as possible. Effectively they evaluiate the risk and decide whether the returns make it worht the risk.
Going on and on and on about how risk management strategies are obsolete and need to be overhauled is a fallable argument because that implies that all risk can be managed away. Well I suppose it can but then your returns will also managed away.
Complain about this comment
Taking aside the farrago around Goodwins thoroughly undeserved pension, and the complete shambles RBS and the government have made over this, it's fascinating that a 2.7 million lump sum attracts a gob-smacking tax rate of *two thirds*
I could just about accept a 40% tax on such large amounts, but when more than half your cash goes over to the taxman there is something dreadfully wrong.
Whilst I'd shed no tears for Goodwin losing out on this, the very fact such a high rate exists is disgusting. No wonder anyone earning over a certain amount either leaves the UK or does their level best to evade or avoid such taxes.
This is a tale of greed from both sides, the undeserving Goodwin and the looting government of the UK.
Complain about this comment
Whilst FG's pension is clearly indefensible, HM Government have been using it to distract attention from the real waste. So if the Treasury are leaking more details, through Peston, of this man's pension, it must be because there is some other massive splurge of taxpayer's money going on. So come on Robert, where's the real scandal?
Complain about this comment
Oh there's no doubt that the government has hung him out to dry on this one. Who do the public hate and distrust more than politicians? Bankers, that's who, and don't you just love watching all the hot air and 'anger' from the government about it?
If they could do something about it, they would have done so by now, instead they are reduced to hopping up and down on the touch line 'expressing anger' and hoping no one will notice that it was all their fault in the first place.
Now we are left with two of the most highly priced firms of lawyers in the world slugging it out. One paid for by the treasury (taxpayer's money) and the other paid for by RBS (ermmmmm also taxpayer's money). Where exactly is the sense in that?
I'm almost prepared to bet that the entire legal process will cost more than the damn pension was worth in the first place.
Complain about this comment
Lord Myners WAS claiming naivete in trying to wash his hand of this fiasco. But it was unconvincing, you have to question his judgement when he failed to ask about the specifics on Fred's pension even though he is a pension expert because of the RBS "distinguished" board members in the meeting.
Is Lord Myners negligent or complicit in this matter? You decide.
Complain about this comment
I was sat on a train opposite two RBS IT staff last week who were talking candidly about the company, saying it was guesswork which "assets" were worth anything, and that the company was wasting a fortune on contract IT staff who were doing tasks that a trainee could do. They concluded "Still - who cares - its the taxpayer thats paying for it not RBS"
RBS should have been allowed to fail
Complain about this comment
Wouldn't it be interesting to know whether Linklaters suggested that RBS brief them to seek a way to avoid paying Freddy, rather than to seek a way to repel Slaughter & Mays attack.
There is a subtle difference, but I suggest that neither of the lawyers is seeking the truth or a good solution.
Of course there is much more moolah for S+M and Linky's if they are both arguing from opposite sides; then they can charge by the hour for months (maybe even years).
I might be getting too cynical for all this, but I suspect this will run up legal fees into the millions, without ever getting to court. (well apart from Harriet Hairnet's court of public opinion.....)
Regards,
Complain about this comment
My guiding principle is also "no rewards for failure".
Sack Lord Myners and make sure he does not walk away a massive pension...
Complain about this comment
I'm also fascinated by the comments you make as to the 'value' of the money he took:
'he has taken a £2.7m cash lump sum from his pension pot. This is worth £4.5m to him, because RBS is paying its former chief executive's £1.8m tax liability on it.'
At the risk of sounding like a dummy, I'd say that the £2.7 million is worth exactly that, £2.7m - not £4.5m or any other figure that can be dreamt up. There seems to be an equal obssession with the banks and with the taxman for assuming everything is worth the maximum theoretical amount possible and then expressing surprise when that turns out not to be the case.
Complain about this comment
This is reported as if it is something unique to Sir Fred, when in reality every civil servant mandarin in Whitehall (and MPs?) would probably be able to do the self same thing.
In many approved final salary pension schemes the recipient is able to take three times their annual pension as a tax free lump sum. Some schemes offer the opportunity to commute annual pension for more tax free lump sum or vice versa.
Just how much tax is the bank paying?
Complain about this comment
Fred Goodwin is showing dangerous signs of being a human being - and not behaving as the hyper-rational economic actor that some might think.
In taking the cash, Goodwin has displayed a phenomenon of irrationality called hyperbolic discounting - but is it actually rational to return it? Only under very narrow assumptions - see this link for details:
http://www.knowingandmaking.com/2009/03/goodwin-discount.html
Complain about this comment
#15
Frank, the tax rate is 40%. The entitlement for a lump sum is 25% of the fund, i.e. £4.5m, which when taxed at 40% results in a net payment to Goodwin of £2.7m.
Actually, this is the good news. The government can now afford to pay their abortive legal fees when it is finally established that they have no case. £1.8m might just about cover it.
I am more interested about who will pay Myners' legal fees if McKillop decides to sue him for concocting an "elaborate ruse", allegedly, to allow Goodwin to resign with a massive pension. Crash's spokesmen have endorsed the phrase, so no doubt that's another pointless legal bill for John Q Taxpayer.
Oh well, at least the lawyers are still making money.
Complain about this comment
@22 Fred is not going to pay taxes on the 2.7 mil because that tax has been prepaid to the Treasury by RBS.
So it is like giving Fred 4.5 mil then asking him to pay his own tax on that amount.
Complain about this comment
Obama has ordered USA Treasury to explore every legal loophole so as to cancel AIG bonuses and "make America whole" according to NY Times today.
We have recently learnt that there is a class legal action action against RBS in the USA that if successful might mean that Fred the Shred loses most of his ill-gotten gains.
If both these attempts fail to produce the desired results legally what will be the next move to bring these robber barons at AIG and RBS to justice?
It's more than a thousand years since Pompey the Great said "Don't quote the Law to us. We carry swords "
How will we in the 21st century arm ourselves to fight against the thieves at RBS and AIG and others like
them if the Law is powerless to help us? Maybe Obama can find a way to change the Law. If he can there is hope for a fairer society both in the USA and here.
Complain about this comment
Peston and ZanuLabour - excellent bedfellows - spin for all u r worth against Sir Fred - maybe the plebs will forget WHO was involved in the negotiations - NOT a chance - HMG and Myners MUST be made to pay - have a blog asking real questions of these incompetents, Myners and his team of advisers??? - they were well and truly stuffed by RBS - and Myners is an expert???? - heaven help us.
Complain about this comment
I'm glad Frank_Castle could just about accept a tax rate of 40% because that is exactly the rate that was applied. The gross (in every sense of the word) amount that he received was 2.7 + 1.8 = 4.5 million. 40% tax on the 4.5 million is 1.8 million, leaving 2.7 million for him to spend on sweets and bus fares.
Now the question for Robert: are you absolutely sure that only the 2.7 is taken from the pension pot, and not the whole 4.5? That would be unusual, and tantamount to giving him another 1.8 million to add to his retirement settlement. The pension reduction of 703 to 555, i.e. 21%, doesn't square well with either of these explanations: if you take 4.5 from a 16 million pension pot you reduce it by 28%; if you only take 2.7 you reduce it by 17%. I don't for a moment buy the argument that RBS has asked him to reverse the lump sum because it needs the money: we are talking single figure millions, the bank has lost double figure billions. That would be like haggling for £5 off the price of a brand new porsche: an irrelevant distraction.
Perhaps you could have a bit more of a dig here, Robert?
Complain about this comment
I would very much like to see this man as the subject of a "random" H M customs & revenue investigation... he clearly has no morals and as such no doubt will have been involved in any number of dubious accounting exploits.
The threat of a bit of random forensic accountancy might encourage him to crawl under the first available rock (no, not Northern) with a reasonable amount to remunerate him for his complicity in abject failure - I would feel comfortable with a sum around £0.00 -
I would love to see him have to go and look for gainful employment in a real world meritocracy - and with a CV like his - I wonder "would one like fries with that?"
Complain about this comment
I expect Harriet Harman will tell us that this is unacceptable-and-therefore-won't-be-accepted, too.
In the spirit of overall hilarity: we know a little song about this, don't we, children ?
Complain about this comment
Re: "a bank that is somewhat short of the readies."
They must be desperately short if 2.7 (or even 4.5) million is that important to them. If you have any money in this organisation then it might be a wise move to get it out ASAP.
Complain about this comment
"Sir Fred took the Royal Bank to the brink of collapse"....... This is beginning to really annoy me.. Let's put it right shall we..
"Sir Fred took Royal Bank to the brink of collapse albeit that the strategy he followed had the approval of the RBS main shareholders and the tacit support of Gordon Brown who presided over an economy where household debt reached record levels of £1.4 trillion, the trade gap broke new records and house price inflation exceeded all expectations.
Unlike Sir Fred, Brown is still in his job and will still get 100% of his pension"
Complain about this comment
@28 as someone who actually met some of the Treasury officials involved in this, in the aftermath, I think you have to take the context into account. When I met them, by then a few weeks afterwards, the entire team was still utterly exhausted having worked round the clock for several weeks. That they failed to spot this final hand-out from the departing management team to itself, is unfortunate but not all that surprising: they were not directly involved in the exit negotiations and were directly involved in the extremely complex and serious recapitalisation negotiations. They are human, that we know. Much more serious is the charge that the departing board, who were all in part at fault for the rbs disaster, would appear either to have ignored or not sought appropriate advice on the minimum they could pay the departing ceo; or to have been badly advised. In either case we have a target to aim at, and it will be disappointing if the legal system is insufficient to make the charge stick.
Complain about this comment
Myners is being highly economical with the truth. RBS could not have given him 12 months notice and fired him - basic principle of employment law, with very few exceptions, people on fixed term contracts are entitled to renewal of contract otherwise it is unfair dismissal. They could not fire him because he had not done anything worth firing him for - if you under-perform (and lets face it he certainly did that), employment law requires that you put him on a performance review process. Problem was govt. told RBS to get rid of immediately so only option was voluntary termination which meant he could negotiate a pay off.
now obviously we cannot accuse a politician of lying to parliament (that is very serious) but Myners has been a businessman and presumeably has some basic knowledge of employment law - and there is a large govt. dept who could brief him. I find it difficult to believe he was not aware of the problems and therefore comments such as "just give him 12 months notice" were clearly designed to divert attention.
If you do not believe me ask any small businessman who has tried to fire staff for incompetence or poor performance in say the last 3-5 years.
Complain about this comment
Think Later and Laughter & Dismay.
Clearly, this will be a clash of legal titans. I wonder how much THEY'LL make out of all the shenanigans.
Does anyone in this country actually PRODUCE anything, any more?
Complain about this comment
One thing that Lord Myner mentioned this morning which, does not seem to have been reported on the news channels since is that when Sir Fred joined RBS his pension provision was set up to artificially reflect him having started with the bank when he was 20 years old thus providing him with 20 years plus of pension contributions that he had never made.
Surely this need further investigation/comment?
Complain about this comment
@32 Nice try but RBS would not be allowed to fail. The UK taxpayer would just be forced to stump up more cash if there is a bank run.
Don't you think we have been collectively punished enough for the sins of the bankers?
Complain about this comment
Robert
Has it ever crossed your mind that people believe you are receiving money from the License payer(tax payer) that you do not deserve. All you do is wheel out your negative views so you get your money!!!!
Complain about this comment
#2 tom edinburgh if Fred Goodwin buries his pension lump sum on a beach in the Caribbean then I'm in luck matey!
on other matters, Roberts twin posting today - the 1st one on how banking is sooooo important and we should value it; the 2nd returning to the regular bash-Fred themes - yet again proves that he is simply running interference on behalf of the govt and maybe his friends in the City
the govt should be advised that the general public anger against the banks and bankers will last a very long time but that we also have the good sense to blame the politicians too; kind of obvious really and Myners/Brown/Darling's claims they never agreed anything is strangely similar to all of these 'we don't condone torture' denials we hear about poor Binyam Mohammed
only the most naieve person would fail to understand what UK govts get up to and also that the City continues to exert huge power and influence at Westminster, over both Lab and Tory parties; that is unlikely to change much unless we somehow managed to elect someone else
but as they say 'if voting made any difference it would be made illegal'
cycling through Bishopsgate earlier today it's interesting to see that the Heron Tower is up to 12 floors (will be 46) and the foundation piling for the Pinnacle is going full steam (final height 60 floors); the Shard also to be built; I think you could say that there is quite a lot of confidence in the City that everything will be back to 'normal' by 2012/13
but Fred Goodwin may well find himself spending a lot of his money on lawyers if the US courts go after him........ a few others may get made examples of too
I can see it now: Conrad Black, Bernie Madoff, Fred Goodwin and various AIG execs all sharing bunk-beds in the wing of a nice little American prison somewhere
or perhaps Guantanamo Bay; it will be available for new occupants soon
the dog barks and the caravan moves on
PS: this website redesign is ok but why didn't you introduce a 'recommend' button whilst you were at it
Complain about this comment
Only winners will be the lawyers, chaps. This one will run and run, anyone want to place a bet on what the legal fees will amount to?
Complain about this comment
Slaughter & May: would that be the same firm that advised Barclays on it's "Project Berry" UK tax analysis?
Complain about this comment
In order to avoid rewarding bad performance, wouldn't it be possible to take an equal few million out of the other Directors' pension pot? They were the ones that apparently signed off his early retirement, so why should they not pay for their mistake? After all, I'm sure that some residual culpability must be washing around in RBS somewhere. It may not penalise Shreddie, but at least some other banker will be crying into his pillow at night.
I am sure someone will point out an error in my reasoning.
Complain about this comment
Fred played the game in which Gordon set the rules.
He played it very well and his reward was getting agreement to draw a huge, obscene even, pension when the world was crashing around his ears – very well done that man.
It's a done deal and the lawyers know it, but as they are just mercenaries paid to dissemble on other peoples behalf they will give you any opinion you pay them for – and they are being paid very well.
So Fred and the lawyers get fat while the tax payer picks up the bill – was it ever thus.
The only part I find unedifying is that Gordon is attempting again to steal money away from a pensioner, but on this score he has form – remember that £5 billion a year he has been taking from future (private sector) pensioners since 1997?
Does your pension feel safe with Gordon?
Complain about this comment
Myners himself has a GBP 4 million pension pot - yup, from RBS from his tenure of 3 years at Natwest. So he cannot plead ignorance about RBS severance practice and the application of pension pots as a payoff.
Complain about this comment
I just look forward to joining the class action suit against Gordon Brown as we, the taxpayers, seek to claw back his pension and anything else he has after his runination of this nation.
Complain about this comment
FOR CRYING OUT LOUD
FIND A PROPER STORY
NOW
What are the government hiding under all these smoke screens. Are you conspiring with the Zanulab dictatorship?
Goodwin and his greed, lawyers and their greed, bankers and their greed, regulators and their incompetence.
GIVE IT A REST WILL YOU and start some proper investigative journalism not snippets from your banking and government cronies.
You are supposed to be the BUSINESS editor not just the banking gossip.
Complain about this comment
26 Wannabebanker
I'm completely aware of the numbers and the tax implication, my point was more general about the high numbers being bandied around. Regardless of what he got or what tax was paid, his £2.7 million was worth exactly that, regardless of who else paid the tax - whether the tax man assesses that he has a chargeable benefit from that as his former employer paid the tax could be a subject debated until the end of time. He'll argue his contract terms and the taxman will get pushed by the CPO (Court of Public Opinion and shady government types) to try and score points to alleviate public anger. This case could keep the legal profession in wigs for years to come...
Complain about this comment
ah. your last paragraph says it all.
just what arrangement did Lord Myners and Sir Fred come to, in the end?
as Lord Myners is not naive, was it possibly that in return for 'silence' over the 'banking scandals' and perhaps even more damaging information to both the Gov and the Finance Industry, that Sir Fred was allowed to take his money and walk away?
perhaps we'll never know.
is it really worth chasing this story anymore? unless anyone breaks ranks and spills more beans, we must move on.
there are too many well qualified people out there who have been reduced to penury and at present, have no way out, nor their wives and children.
this would be a far better story for you to follow up Mr Peston, "just what is Gordon Brown going to do with real money and real action for just such people, innocently ruined by incompetence?"
Complain about this comment
@45 Lord Myners categorically denied getting a RBS or Natwest pension to the treasury select committee.
Is there a technicality that makes him able to claim that he's not getting a pension from either RBS or Natwest?
Complain about this comment
"The new law of evolution in corporate America seems to be survival of the unfittest."
Gordon Gekko (1987)
Seems we are now following suit.
Complain about this comment
Go on push this some more and you can probably find out that RBS will also have paid for the legal and accounting advice which pointed out to Fred that he could screw even more out of RBS by taking the lump sum which by now is probably residing somewhere warm and sunny.
I very much doubt Fred cares very much what is said about it any further, if he had been bothered he would have volunteered this fact in his famous letter. Hopefully he has done the decent thing and given most of it to a charity and will endow all but a reasonable sum of his ongoing income to other charities as he collects his plunderings in years to come.
What is going to cap it all is that having involved the big hitting, big charging city solicitors to argue the case that HMG and RBS will between them likely end up spending more than will ever be recovered doing it. Just adds insult to injury.
Complain about this comment
Is the Fred lump sum an amount that he would be able to draw as a tax free lump sum as any other pension fund holder would? If he agrees to pay back this lump sum I assume that the money goes straight back into the pension pot and increases the amount that Fred can draw on an annual basis.
More smoke and mirrors.
Anyone know if there are any jobs going with the legal boys? No doubt with the fees they earn out of this one they can fund an untold number of apprenticeships thereby reducing the number of unemployed. Surely they wouldn't keep all that money (less 40%) to themselves?
Complain about this comment
If it walks like a duck and quacks like a duck, well it must be - a decoy.
So, if I understand correctly, even by "paying back" his lump sum, Sir Fred still wants RBS to gross up the amount to 4.5m and set aside a 40% tax provision (1.8m) on top of his existing pension pot.
As you point out, there could be grounds for a legal challenge to the entire RBS board for misleading shareholders and perhaps breaching accounting standards, but it is easier for this Government to let Sir Fred draw the fire away, be tried in the "courts of public opinion", lest the Treasury be required to air its dirty linen in a court of law.
What we really need is a real public inquiry (i.e. not led by another of the establishment parachute regiment) into why so many glaring holes were allowed to open up. Unlike how_many_andies at #34, I am unsympathetic to the Treasury officials simply because this crisis was being ignored until the last possible minute - unfortunate for those pressed into a last-minute knee-jerk 24x7 panic - but criminally irresponsible for those who allowed the situation to get to that point.
Complain about this comment
That's more like it Robert. Nice and juicy. Well, as I think you pointed out before it's just they way they seem to do things in the boardroom. What a shambles though. All of this may well prove to be a sideshow as I gather good old Sir Freddy's about to be sued in the US courts. Furthermore, if he loses he'll have to find a sizeable sum from his own (yes that's right: his own) money to compensate irate shareholders. I'm salivating at the thought of it. Hey, you never know, we may well see a whole bunch of ex-bankers busking on the London underground in the not too distant future. Well, maybe not, but it's a nice thought.
Complain about this comment
If the government cannot resolve this issue to the satisfaction of the people then it will be a inflamatory situation as total confidence will be lost.
Why should people invest in the stock market?
Why should people have private pensions?
Why should people rely on the success of badly run companies to provide their future earnings?
If you look at history (which no reporter is able to do) you will see the following has all been down to successive Government policy. Making a mockery of 'change' which is banded about as a reason for voting blue instead of red - or vice versa.
Historically it has been:
1- The Government start encouraging private pension schemes claiming they are 'better for everyone'
2 - Those schemes get into trouble because companies are too willing to 'dip in' during hard times creating huge pension deficits.
3 - The removal of FSP's by all companies (and I think even the Government) means we're all FORCED to play the stock market by having a private pension.
4 - The market breaks itself (as it always does) and screws everyones pension up - even stable fixed income products are hit hard. Record low interest rates are brought in to stave off recession.
5 - We end up with hundreds of thousands of retirees who are no longer eligible for SERPS and whose private pension is worthless.
The Government has well and truly screwed us, in fact forcing millions to work beyond retirement age.
Where did the money go? Well think about it, Fred's pension is based on earnings, earnings which have been over-inflated for the last 10 years because all the market monkeys thought they had finally cracked it.
The moral question the Government needs to address is why it is now working against the needs of the most vulnerable citizens (pensioners) whilst claiming to be a Government 'for the people'.
I don't think they're going to make it to 2010 - despite the over-optimism from the states - something big is starting and it's called ARM and it's going to floor the Western governments who have kidded themselves that 'the worst is over'.
Oh how the folly of the stupid is so evident in our Government. They seriously don't have a clue about what's coming next - or they would have had the army recalled and out on the streets....
Complain about this comment
I think Sir Fred has actually been quite magnanimous in not taking his lump sum....I would certainly rather have a lump sum of £2.7m than the extra pension.
We should all heave a sigh of relief that the no-one has been allowed to nobble a done deal on pensions....if they could do it to Sir Fred then they could do it to you!
Complain about this comment
#40 Somali Pirate wrote:
"...on other matters, Roberts twin posting today "
I think you'll find Robert makes common purpose and the two posts have the same provenance. If you're after buried treasure, forget the seven seas and start digging on the maitland. You might even find something of interest on Radio 5 - you can always go back to pirate radio stations if not.
Complain about this comment
...and anyone who dares say Fred was worth the money will get a back hand slap from me - I can assure categorically that I could do Fred's job with one hand behind my back and juggling a set of running chainsaws and still have time to make the tea.
Trust me - it's not rocket science being a CEO of a bank. In fact it's evident that you must be an idiot to manage to screw up one of the most practiced busineses in the history of Capitalism.
Don't make the mistake of thinking that pay has ANY relation to ABILITY. Anyone who does is a mug.
I know this because I am over-paid for the work I do, as are my colleagues. The less I have worked the more I have got paid, as i have climbed the ladder work has become easier and easier and the people I work with are getting thicker and thicker.
It's all the king with no clothes......all over the place...
Complain about this comment
"I remain slightly puzzled"!
Welcome to the puzzled.
we need to recover and reclaim much more than the tiny £16 million from one person. We need to get back the £ trillions that got swindled and stashed away over the past decades.
Yes, he is a scapegoat.
Over the years my impressions are that lawyers care mostly about fees, in whatever disguise, cosy arrangments, elitism, then about laws. Neither service nor justice matters much.
Oh, is not Cheery Blair (Tony's wife) representating the councils suing RBS? If she is, then she may want to ask her husband whether he had kept his eyes on the ball in his term of office.
Complain about this comment
@48 Lord Myners explained Fred's unusual pension very clearly. He was clearly talking about net rather than gross amounts.
More broadly, don't you think Fred's pension was understated because the RBS board is aware of how politically explosive Fred's large pension would be?
Complain about this comment
All getting very funny now - may be that's the point? All it needs is a Mrs Dromey to pipe up again with one of her massivley under-informed interjections and we'll be laughing until Easter.
Myners is clearly squirming on all this - and in the interests of transparency and openness, he should release a full statement of his own pension arrangements. If he doesn't, we will always wonder what he was thinking when he, the great Pensions-meister, didn't ask the killer questions.
Complain about this comment
Pension are not paid by the company (RBS) but by the pension scheme trustee. I accept the company has to finance the scheme but they are totally separate legal entities. He has no doubt took the TAX FREE LUMP SUM that is available to everyone at retirement in exchange for taking a reduced pension, in this case, £2.7m for a £150K reduction. However as he will pay 40% tax on his pension, it is obviously to his advantage to take the tax free sum, as the £150k will only be worth £90k after 40% tax.
£2.7m is equivalent to 30 years at £90k per year, without taking into account the fact that the £90k will no doubt increase every year in line with RPI, or that the £2.7m will gain from being invested to produce an income.
With his tax position, he would have been a complete idiot not to have taken the lump sum.
Complain about this comment
I don't for one moment believe that Sir F should receive such rewards for his failure.
However, I can't help but wonder if perhaps Toni Brisby (Chair) and Martin Yeates (Chief Exec), recently resigned from the Mid Staffordshire NHS Foundation Trust, might just have walked off with a state-funded NHS pension.
Whilst I'm sure it would not be of the magnitude of Sir F's, we'll wait and see if there are questions asked in Parliament about rewarding failure in these public sector cases. Perhaps Sir Ian Kennedy should be asked why his Healthcare Commission took so long to discover the problems?
I just can't help but see some parallels with the recent history of some banks and the FSA, somehow.
Complain about this comment
I suspect that rather than leave the money with a dodgy bank, he has put the money under his mattress.
Complain about this comment
Maybe that was the price for Sir F to keep his mouth shut!
Complain about this comment
"After all, Sir Fred took Royal Bank to the brink of collapse. It wouldn't be alive today if we as taxpayers hadn't propped it up."
Robert, you have not been listening to Gordon .... he steered the UK through 10 whole years of "sustainable growth"; a period in which RBS and Sir Fred were integral parts of that sustainability .... they played by HIS rules and they are perfectly entitled to their spoils.
Gordon, on the other hand, must face the music one day ...
.... personally, I cannot wait ..... guillotine and knitting needles at the ready ! !
Complain about this comment
The new format is not working properly. No red bar appeared automatically below 'Goodwin's Tax Break"
Found my way there eventually - round the back so to speak. While on the subject of the new format - please-
please get ' Them' to change that ghastly pie faced picture of you on the blog. We've all seen you often enough
on video to know that you are actually a truly stunningly handsome bloke - so please get 'Them' to get rid of that horrible pic. It looks like the worst kind of passport photo.
Complain about this comment
Allow greedy Fred to keep his pension. BUT have the auditors recalculate the accounts for prior years, the massive losses have been created over many years not just one. Then recalculate bonuses and reclaim the overpayments from all the fat cats. Not just RBS, but all banks. Auditors are often called upon to recalculate prior year accounts when new information is brought to light......Ian
Complain about this comment
Sling enough mud at Goodwin (who deserves it ) and it deflects the flack off Brown and his puupet MP's
If Goodwin should not be rewarded for failure then Brown and Darling should retire pennyless
! Any comments on that point from the "Independent BBC" ?
Had Enough
Complain about this comment
just came across this story on Globe and Mail business pages a little while ago; a new IMF estimate says that contraction will be worse; for UK it says GDP to shrink 3.8% in 09 and still be -0.2 in 2010, which would make the UK the only major economy to stay in negative territory next year!! haven't seen these figures elsewhere
http://www.theglobeandmail.com/servlet/story/RTGAM.20090317.wimf0317/BNStory/crashandrecovery/home
would be good if Robert could look into what these figures are based on, or report on the growing auto industry crisis, or housing, or unemployment; anything, instead of continuing with all this BREAD AND CIRCUSES STUFF
HE'S TURNING THE BBC WEBSITE INTO THE EQUIVALENT OF A REDTOP TABLOID
must say I pretty much agree with #47 sosraboc
Complain about this comment
Sounds as if it all went something like ...
LORD PENSIONS: Right, Gordon, I'm off to that meeting with RBS now. What do you want me to say?
FLASH: Just tell them there should be no reward for failure.
LORD PENSIONS: That all? Anything else?
FLASH: No, just leave it at that. We don't want to persecute them, do we? They'll get the message.
LORD PENSIONS: Oh...ok then.
In which case, absolutely no-one is to blame (again).
Complain about this comment
#15 If he recd £2.7m and tax was £1.8m then he has been taxed the same as any other 40% tax payer - £4.5m * 40% = £1.8m.
What I am unsure of within all this is there are some recent rules regarding Pension Fund ceilings and prohibitive rates of tax above these fund values - Sir Fred's will definitely be in the very high rates band - is he suffering this tax on his pension or are RBS responsible for all taxes under their agreement with Sir Fred - now that would really be wrong.
Complain about this comment
Perhaps Lord Myners, who is actually one of the good old City in-crowd, just didn't think there was anything wrong with Goodwin's pension!!
He was probably amazed when all the fuss blew up.
I wonder who is looking after Myner's financial interests while he is in the government? Probably another good old City boy.
Possibly a mate of Goodwin's?
Complain about this comment
Keeping at a safe arms length from all of these failed people will not be easy. The deep pain and recriminations of the smoke and mirrors' system they have put in place to try and obscure their failings is yet to start.
Although they have been capable of starting the printing presses, otherwise known as the perpetual money machine, stopping them will inevitably have to be carried out by wiser replacements.
Complain about this comment
Just now on the main News page 'Lord Myners says he "did not negotiate, settle, or approve" Sir Fred's pension'
Reminds me of a comment by the late great Brian Clough, when questioned about an opposition player who was obviously offside but deemed by officials to be "not interfering with play" ...
His response: "If he wasn't interfering what the **** was he doing there".
So, Lord Myners, may I be so bold as to enquire as to exactly what the **** you WERE doing during the Sir Fred negotiations at RBS ?
Complain about this comment
well done fred goodwin you have shown up brown and his shambles of a treasury for what they are ....useless. brownwatch 440 days.
Complain about this comment
Credit where due.
Moderation speed is much better on the new format.
Thank you.
Complain about this comment
The REAL STORY at RBS
What Crash Gordon is desperate to keep hidden is the story of Cherie Blair now the advising partner to a US Law firm who has issued a Class Action is a Federal Court against RBS, its Directors and Chairman and Fred the Shred.
This means that with the British Government owning 75% plus of RBS, we, the Taxpayers are being sued by hundreds of investors in the USA in a Class Action over the merits of the Rights Issue called last year by RBS
These Investors feel that they were "duped" as to the financial status of RBS which was all but bankrupt at that time. All the Legal Team need to do in the Federal Court is to ensure that the Judge grants them jurisdiction over RBS ( which is easy) and also others involved. This case could run for years and cost us (Taxpayers) Billions at the end, even to settle out of Court, which they will try first.
This US Federal Case could well mean that Politicians and possibly our own Chancellor and Prime Minister could be requested to make on tape "depositions" in an American Court case, with huge implications for RBS and political dynamite for GB. All the secret chats after hours, emails and telephone records of Number 10, the Treasury and all our their home numbers and mobiles may all be scrutinised in Federal Court.
A Federal Judge in the USA would not blink when signing jurisdiction and deposition demands to bring in Third Country Nationals. Look what happened to the Nat West famous three? There is a LOT more money involved in this case, Billions in fact.
THAT is the real story Robert, the status of the Class Action in the US Federal Courts, supported by our last Prime Minsters wife!!!! Cherie may yet extract full revenge against Gordon Brown for perceived attacks whist in Office on her beloved Tony. ( by Gordon)
This RBS Class Action could well run like Watergate and Nixon, once the US Federal Courts grant the Class Action Legal Team jurisdiction over all the UK citizens, who may be involved. Cherie Blair will of course assist and advise on the List of Names. We could yet see top Civil Servants and others giving evidence in Federal Court, followed by Governmental Ministers and GB at best!! This is why Robert is so keen to throw angry mud at Fred the Shred, to stop the REAL story unfolding now. Anyone wants to follow this see the Drudge Report online.
Come on Robert, when are you going to write about this US Class Action and all the ramifications? When will you interview Cherie Blair on the subject? If RBS remains in Government hands or is Nationalised, this Federal Court Class Action will move relently on, towards the heart of British Institutions, not just the City. There is no excape, as if those charged ingore a Federal Court, then a Judgement will be made in their absence and called in at the UK High Courts. It is called a "Default Judgement", where the High Court would not discuss the Case on its marits, merely enforce the Federal Court Judgement, if legal and proper.
RBS was and remains an International Banking Institution and if it has broken US Laws, then God help RBS and all those who sailed in Her. As GB and his merry team are de facot the new Owners, they will have to answer everything in US Courts eventually or make a "default" The Courts nailed Nixon, so why not a few lower level European Bankers, Directors and their Political Masters? If I am thinking this way, what are GB's spinners thinking in No 10? Come on Robert, you have the Story now. I will also bet a pound to a dollar that Tony Blair is wataching this case too. for maximum advantage, naturally. This Case will be the Blair revenge for Brown's complete lack of loyalty, when Tony was PM. Cherie has the knife now, just sharpening it.
Complain about this comment
Long may Fred Goodwin maintain his attitudes and behaviours on his pension.
It is very profitable for a few, very useful for some and very eudcational for most of us. It certainly helped me in solving some of my puzzles.
Complain about this comment
Puzzled. How could Goodwin get an annual £700K pension from a £16 million pot? That's almost 4.5%. Interest rates are nearly zero, company profits are down, so are dividends, if any.
Is the £700K guaranteed? If guaranteed, then who is picking the bill for the shortfall?
Complain about this comment
They wont take Sir Fred to court. Sir Fred is in a position to know all sorts of little details of Gordon Brown's attitude to credit while Chancellor. Details that wouldn't look good given subsequent events in the economy. If they go to court then some of that is sure to come-out.
More than anything else, Gordon doesn't want to be blamed for the economy - so they wont go to court and Sir Fred will keep his pension.
Complain about this comment
Lawyers with different views? Nah. That never happens.
It won't cost us a penny of course.
Why Myners didn't ascertain this is a good question. It goes along with all the otehr questions such as:
(1) How did Fred persuade the board to vote for this? Cronyism? Sounds illegal whatever else is true.
(2) These are VOTED pension rights and not accrued rights - I believe they can be challenged to a greater extent.
(3) Why was there no form of core bankruptcy - that allows you to choose which creditors you pay and which you do not. Presumably HMG bailed tehse institutions out because the loss of confidence due to a British bank going bust was percieved to be undesirable, but... you get to choose who you pay. That allows you not to pay:
(a) The management
(b) Any pension that is not statutory
(c) Those due a bonus (or at least only those you deem to be worthy)
(d) The shareholders
(e) The bondholders
Most of (a) through (c) is a given that you do not pay more than a few bonuses at most to lower levels of staff.
(d) Is tougher - they are investors and the value of their investment went down as warned in the product literature (remember the bit where it says "the value of your investment may go down as well as up"?)
Except.. that many of these shareholders are pension funds themselves so there may be an economic decision to allow the existing shares to continue. This is questionable of course.
(e) Is really tough. There are £trillions owed to these people, probably many of them Chinese lenders and therefore much of it is in foreign currency and so tied to their exchange rate rather than ours (gulp). To make the bank bankrupt would be to annoy and undermine the confidence of such people - not a recipe for long-term success if you wish to continue as the world's major financial centre. However, they shouldn't be paid in the strictest sense of capitalism.
But how do you square this circle politically? If you make the bank bankrupt how do you justify paying off the creditors as above?
And if you don't, how do you justify paying all of the above?
I suspect they thought it was easier to pretend not to notice, to have taken their eye off the ball. It could be said that they could still have prevented Fred's pension if they nipped in quickly before the board bunged their old mate a few million, but paying off the creditors
who took a risk and lost... that's a tough one.
It could be argued that those people were investing in Britain and so we should make good. But they were actually investing in private companies, so in reality they are only another set of victims of investment.
Speaking as a voter, I'm not impressed by the way the Govt have hid under a stone on this. Not the least of the problems it has caused is that they have had no say in what is being done with taxpayers' money. It is largely being used to shore up the balance sheets of those will ultimately pay off the creditors in (e) instead of lending to the average Brit to buy a house.
Had they done it properly they would have been able to control of these issues and could probably have nipped this recession in the bud.
Of course, had they not insisted on solving every little temporary skills shortage by allowing permanent immigration then we wouldn't have been in recession anyway, since with a lower population we wouldn't need economic growth. Or nowhere near as much of it. Sigh...
Roll on the next election.
Complain about this comment
Banks perform a useful task in providing capital for necessary industries. However most of the City activities are for gambling which does not add to the real wealth of the nation.
Complain about this comment
Further proof GORDY & THE GANG HAVE NO CLUE!!
Complain about this comment
No mega reward for failure. But there are bigger issues to resolve.
The trillions, yes trillions stashed away in tax havens, resulting from barely legal 'creative accounting' in many cases, trillions which sustain a shadow banking system worldwide, these trillions need to be made 'visible', accounted for and properly taxed. This is the only way to stop the morally corrupting effect which these trillions have, undermining the rule of law in the global financial system. Robert M. Morgenthau, District Attorney of New York, said nothing less in his letter 'Havens for Tax Evasion' to the New York Times, published there on the 11 March 2009.
You can read more in detail here:
http://globalinsights.wordpress.com/2009/03/17/prosecute-unlawfully-megarich/
Complain about this comment
As John McFall said on The BBC Daily Politics show today Fred Goodwyn showed Lord Myners a 'clean pair of heels'.
Complain about this comment
Don't the directors of public companies have a legally binding duty to act in the interests of the shareholders? Clearly, it would be better for the shareholders if the departed Mr Goodwin was paid less, so what justification can be given for RBS employing lawyers to make sure he is massively rewarded?
Complain about this comment
Give him a choice,
GIVE UP YOUR ENTIRE PENSION AND ALL THE BONUS YOU EARNED WHILST AT RBS or YOU ARE GOING TO JAIL AND WILL LOSE IT ANYWAY.
CAPICHE?
Complain about this comment
This is simply yet more distraction from the main issues and the culpability of the politicians. Can we have some serious analysis of the real issues?
Complain about this comment
I might be alone on this but I hope Sir Fred keeps his pension, every penny. And why, because nobody likes a bully and Fred is being bullied by this Government. It is one of the most unsavoury aspects of GBs character.
Complain about this comment
As Tony Blair and Gordon Brown like to say when they're caught out , "It's time to move on ". Goodwin has got his money it's pointless spending millions more on smart lawyers , trying to get it back, the whole process will cost more than the results can justify. Speaking of lawyers, Cherie appears to be coming out of retirement/ holiday to sue the banks (i.e. The British taxpayer ) on behalf of shareholders who lost money. No doubt she will walk away with more of the taxpayer's cash than Goodwin did.
Complain about this comment
The more I see the more disgusting all this greed becomes.
In the near past top rate of tax was 98%
This was classed as far too restrictive and encouraged the best people to leave the country. The brain drain it was called.
So they dropped top rate of tax down to 40%. So why is it that those in the top jobs are such a load of greedy incompetents.
If this is the best we've got then put the top rate of tax back up to 90% on earnings over 100000 pounds. and let them leave if they want to.
Couldn't be any worse and at least the taxpayer would gain something.
Complain about this comment
I tend to agree with No 47 and also the Somalia Pirate, Robert.
Get to some mature, objective, rational and newsworthy issues not the stuff of the Sun. You are playing to the Gallery of emotions far to often these days and frankly insulting the intellgence fo many of your Bloggers.
No more sound bites or personal vendettas, get us to the meat. When can we get this lousy Government out? How do we, the Electorate sweep the Aegean Stables?
Did you know that the Jury Team Party was launched today? No comment from the BBC Business Section on Mr Judge trying to get 100 fully independent PMs into Westminster? He is putting his money where his mouth is and funding the whole thing online.
Complain about this comment
Lord Minus (his IQ?) was probably thinking about his OWN pesnion when he gets kicked out as a Govt advisor and gets another cushy job in the city or banking world. IF he had stopped Fred's pension, this would have had a snowball effect and thus would eventually have come back to haunt him when his own retirement came about.
Incidentally Robert, despite all the huffing and puffing from El Gordo and his little Darling, there appears to be not ONE JOT of legislation proposed so far (apart from Harriet's Law!!) which will impact on Politicians, Bankers and other fat cat Public sector types - WHY NOT. Perhaps you could ask your Lord and Master Broon (in an independent capacity of course because you do work for the BBC)?
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
That Lord Myners has rather a lot to answer for, just because he wanted a cosy solution.
Nice of Sir Fred to be willing to hand it back, because he is entitled to it under the conditions of pension law.
Were the executives from Mid Staffs who resigned allowed to keep their pensions or are they also tarred with the "No reward for Failure" brush?
Complain about this comment
This just shows the man has utter contempt for any and everyone.
Clearly he thinks he is still the man in charge regardless of his ego leading him into the record books as the biggest muppet to have ever run a UK bank delivering the biggest ever recorded loss.
With all teh micro management this present Prime Minister is capable of it looks liek he has one rule for British taxpayers and another Scottish ones.
This catastrophic mess just gets worse!
Complain about this comment
#56 writingsonthewall:
" - something big is starting and it's called ARM and it's going to floor the Western governments who have kidded themselves that 'the worst is over'."
++++
ARM? Is this the 'Adjustable Rate Mortgage' where the first few years are cheap and the later payments quite expensive?
You are saying the higher rates are about to kick in and that what we have seen in the way of reposessions up to now is as nothing to what is about to occur?
Or is it the ARMs tied to an Index such as Libor, where, because of the big drop in interest rates, a big drop in payments will occur and the lenders will suffer?
Please be so good as to explain what you think may happen?
TYIW (no financial experience)
Complain about this comment
79
Brilliant, I posted some time ago that this would be what would get them. Thank you jonnyzero66.
And do not forget which government passed the one sided extradition treaty.
Oh the irony, oh the joy.
Complain about this comment
#40 somali_pirate_SP500
"I can see it now: Conrad Black, Bernie Madoff, Fred Goodwin and various AIG execs all sharing bunk-beds in the wing of a nice little American prison somewhere or perhaps Guantanamo Bay; it will be available for new occupants soon "
+++++
Thank you for bringing that satisfying picture to my mind. Will they have shackles, manacles and orange boiler suits, too?
What shall we do with those responsible over here? I offer some choices:
Rockbreaking on Dartmoor.
Drop them off on an island like the one of the Hebrides or St Helena
Tower of London, make them print money since they appear to like that.
As a Pirate you will probably have something in mind involving planks, yardarms, keels, chains, someones locker, sharks and such.
Complain about this comment
In the old days very large incomes were taxed at 95%. This was unfair but it did control the amount that people wanted in salary we don't want to go back to this, but it seems to me that the government can change the tax rules to tax all bonus/pension payments over a certain amount (£100K for example) that are paid by companies that are making a loss at 95%. This would not be aimed at one individual but at all companies that are paying out large bonus and pensions for failure.
Complain about this comment
OK
I spoke too soon about the moderation.
I guess JohnnyZero66 post 79 has them chasing around like headless chickens
Complain about this comment
puzzling (@81), the reason the sums work out is that the pension is only partially made up of income from the 16 million, and partially capital: Sir Fred will eventually die and the 16 million will have been used up. Try this website for typical rates
http://sharingpensions.co.uk/annuity_rates2.htm#text1
so far so good. Now here's the bad news
(1) judging by the figures, I think the pension must increase with inflation. Handy given how much debt we are in now...so while we lose our jobs and watch prices rise, he will be insulated with pension rises
(2) the fund is not guaranteed. If the pension costs more than expected, because Sir Fred lives for ever, then the first people to suffer will be the bank shareholders who have to top up the fund. Oh, that's mostly us. If the pension fund were to become insolvent and the bank not be able to meet the deficit, then the pensions protection fund will pick up the tab. The pensions protection fund is guaranteed by...you've guessed it, the uk taxpayer.
Complain about this comment
#79 JohnnyZero66:
"A Federal Judge in the USA would not blink when signing jurisdiction and deposition demands to bring in Third Country Nationals. Look what happened to the Nat West famous three? There is a LOT more money involved in this case, Billions in fact."
++++
So Gordo and others could get extradited to the USA for their alleged financial negligence or alleged crimes by Cherie Blair.
Ironic how the extradition rules were set up.
Who signed that arrangement? Go on, tell me, please. Make me ROFL.
Complain about this comment
I think the amount of bad press Sir Fred is getting is slightly unfair. If you look how far he took the RBS in the short time he was head it is quite remarkable. He took it from a little regional bank to an international welterweight. The practices he employed to do that were the same as every other bank. Also his pension is privately funded he put in most of the income, admittedly for tax purposes but wouldn't anyone else in the his position do the same?
Complain about this comment
It occurs to me that one of the reasons why the banking crisis will never be resolved is that we have such stringent libel laws in this country. By the way can anybody explain to me the difference between Madoff's Ponzi scheme and what has happened with the banks? Madoff built up a pyramid system of investors. Surely fractional reserve banking is exactly that. Worse still, the banks did not even follow the rules (such as they are) of fractional reserve banking. I believe there is, according to these rules, some limit to how much can be lent out without having the funds to back the lending. However, of course, the banks are not guilty of fraud, but Madoff is. I simply don't get it.
Complain about this comment
#81 RBS Pension fund (which is likely to be in deficit as I think many footsie 100 pension funds are). Who funds RBS Pension fund - why RBS - who owns RBS - why mostly the Govt - where does the Govt get the money - the taxpayer. I'll bet THIS Govt leaves the shortfall for the next Govt to pick up. Its in the vein as the Royal Mail which has a multi-billion pound shortfall.
Complain about this comment
I am for Sir Fred. He has made the politicians and their cronies look completely wet. What we need is some ruthless leadership - Fred old chap, the barbarians are coming and we need you...
Complain about this comment
As inexcusable Goodwin's pension is, this £16m pales into insignificance when one considers the unfunded public sector pensions debt of £1,000 billion. About which Gordon has done nothing because of his union buddies?
Complain about this comment
And as the UK slips into depression, Gordon mutters 'Ah pure wish ah hud been tuffer oan the banks 'n at no'
Gordon, as has been mentioned above (The real story is being supressed), its likely you should be in court for dishonesty too.
Complain about this comment
Dear dear Robert, another piece about "that pension". Surely you have twigged by now that a lot of people think this is a bit of a laugh. Sir Fred is obviously taking the michael out of Harriet H and Gordie, and you are falling for briefings aimed at keeping this going, instead of doing a serious bit of journalism about the Governments role in bringing about the current financial situation. By the way, it would be nice to know what lump sum you will be entitled to from your taxpayer funded pension!
Complain about this comment
ps. Good to see the moderators back from holiday (Ha!)
Complain about this comment
I have waited several weeks hear about his tax free lump sum, did the government not know that you can take a tax free lump sum from your pension. Did none of them ask how much that was and why are they talking about as though it is something else. They are taking part in a cover up in my opinion, they come over as shiftier every day. You don't have to be a pensions expert to have the above information. Who made him a knight? Who thought he was upstanding enough to be given a title? We will never know, but we should, this country belongs to the people and government should be answerable to us all the time, not just when there is an election.
Complain about this comment
So Fred the Shred has taken £2.7 million in cash out of his pension fund.
Haven't we heard that his friends have advised him to go abroad and ride the storm out far away from his critics in Britain?
Complain about this comment
No.8 has hit the key issues on the nose. Does editorial control/Peston read these blogs? When will the BBC revert to substantive journalism? The price of taking a high profile public job - like RBS CEO - is a permanent loss of privacy and some personal risk, in terms of as a target for a wide range of law breakers. The compensation needs to be sufficient to allow you to bow and in comfort, when either burnt out or caught on the end of wider events. It also needds to incentivise the brightest and best - ie be very attractive. The current nonsence - stoked up by BBC coverage - is simply serving to put people off these and comparable appointments, at a time when we need top talent in these sectors. Reporting and balanced coverage please - continued tittle tattle and villifcation needs to stop.
Complain about this comment
Regarding the class-action suit, even if the case is won by the American lawyers, who is ultimately going to foot the compensation bill? The UK taxpayer. It certainly won't be Fred; even with his huge pay-off he won't be able to cover it all and he'll probably be living in some far-flung country by then. And why believe the pensioners who have been denuded of their savings will be recompensed if the case is found? It didn't happen for the Equitable savers, so why expect the RBS people end up in a better position?
Complain about this comment
Just could not make this up. The story just rolls from one farse to another.
"Some of the greatest financial minds of our time" have been involved in this fiasco.
The ineptitude or incompetence that has surrounded the whole or should I say hole saga "BEGGARS BELIEF".
Any other organisation would have had the whole lot of them up the road to the dole queue with his P45 tucked neatly under his or her arm with not as much as a penny.
As was said today there has been to much backscratching for too long.
IT HAS TO STOP
Set up an independent judicicial inquiry into the whole sorry state, let the petty criminals out of jail and refill the Jails with anyone who has in any way acted with inpropriety to this situation and allow them to spend a long time at Her Majesty's pleasure reflectiong on their actions that has nearly brought the financial world to it's knees.
Complain about this comment
Post 79. Agree 100% this is the real story. Cherie Blair was never my cup of tea as PM's wife but no one dounbts that as a lawyer she is not only very able but also incredibly tenacious.
She is going to have her pound of Gordon's flesh for his actions in trying to get Tony out of no. 10.
I rather beieve that "revenge is a dish best served cold".
Complain about this comment
Just a pity that Sir Fred and Co were not so vigourous and vigilant at protecting the banks interest as they obvioiusly their own.
Complain about this comment
It's obvious... Treasury and Myners win.... biggest pockets win...AND we are paying both sides anyway
Can't the shareholders tell the executive at RBS to drop their 'vexatious action' and admit the case THEN the actual Directors would have to fund their own case...and we still win because we can print our own money to pay our Lawyers!!
Sorry...we can quantatively ease the fees for our lawyers is what I meant to say.
It's all weird now..but it's nice when the Looking Glass world works FOR us all rather than against us.
Complain about this comment
According to someone posting this evening on the Democratic Underground Forum (in the US), Congress is considering a bill under which any of the 73 (?) executives who received AIG bonuses - made possible only by the bail-out - would have to pay tax on those bonuses at around 90 per cent.
I am sure there is downside to that but the greed with public money has to stop.
Robert, tell us more about how Cherie Booth is about to become even richer, feeding off the carcass of our tax revenue, enabled by her husband's successor. The whole scene grows more grotesque by the minute.
Complain about this comment
I don't care what the legality of it all is. All I care about is the fact that is this fat cat is getting a £17 million pension while there are pensioners in this country who have worked far harder and are struggling to make ends meet because they have ended up having to draw a state pension.
Our government should freeze ALL of Sir Freds assets, whether it is legal or not to take such measures and make sure he does not get a penny more than the average pensioner.
Complain about this comment
#79. At 6:04pm on 17 Mar 2009, JohnnyZero66 wrote:
The REAL STORY at RBS
You've got it one!...
IT'S A MUST READ POST!
Mind you though...I've always wondered what these world leaders chat about when they meet to discuss 'state affairs'. Gordon was only given an hours access the Obama last week...I just wonder what the agenda for that meeting was. You can can only discuss so many subjects in an hour (my guess it was probably only one).
Draw your own obvious conclusions.
Complain about this comment
Just the same old fun and games we come to expect from the banking industry. A typical example is the story out this evening regarding Barclays.
"Barclays Capital will return to court tomorrow in a bid to prevent the publication of leaked documents that allegedly detail how the bank avoided paying hundreds of millions of pounds in tax."
Here was another story that seemed to slip by:
"$1 Trillion "Run on Britain" Disclosed"
http://creditcrunchedoutinuk.blogspot.com/
Complain about this comment
You're confusing me today Robert.
From banker hugging to banker mugging.....I suppose you are trying to tickle the debate along. No problem with that.
I fall on the banker mugging side of the fence.....why?
Simply put they have faked their success over the last decade.
That stuff they were earning wasn't real money....it was counterfeit AAA bonds. On top of all the counterfeit bonds there is £10 in the £1 of CDS liability......For the banks to get back to square 1 they would have to maintain earnings at 2007 levels and pay 90% tax for 25 years.....investment banking died last year.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
I can't understand why the Chancellor doesn't just introduce a new top tax rate of, say, 98% for outrageous payments such as Fred's pension
Complain about this comment
Paul Myners' account of the actions of the RBS Board is very enlightening. Clearly they have a lot to answer for but as Lord Myners said - even at this stage - Fred Goodwin can take an honourable course and relinquish a large part of his absurdly large pension. He should be thinking of his former colleagues who he has let down so badly.
I also think that criticism of Paul Myners part in this matter is most unjust - he has clearly acted with integrity throughout.
Complain about this comment
i agree with comment 8, it's time real attention was turned to the part Brown played in this whole mess.
Complain about this comment
TABLOID TWADDLE
Complain about this comment
#74
Dear Mr Grimupnorth
I seem to remember that the pension fund in question is an unapproved scheme, so no tax relief on contributions but therefore not constrained by lifetime limits or higher tax payments either etc.
Yours nerdily
mrsbloggs13c2
Complain about this comment
btw by higher tax charge, I meant the 25% charge on funds over the lifetime allowance that brings the effective tax rate up to 55%
Complain about this comment
If
JohnnyZero66's The REAL STORY at RBS is true, then I will cease to be an Atheist and become an Agnostic, for that would be poetic justice on a Biblical Scale. In fact I think I would then vote that we abandon the EU and become the fifty whatever it is state of the US, Brown and Co in a US Court, and put there by the UK's treaty his Govt implemented! If you are there God, PLEASE let it happen. Maybe that is what Tony has been praying for!
Complain about this comment
Dear Mr Pirate_SP500
Do you think your crew could threaten the the great hulk legalaction with a hijack. Hold them hostage somewhere out of the way for a bit. Like an oil tanker. You know the drill.
Get some D&O insurance first.
Regards
mrsbloggs13c2
Complain about this comment
I'm confused, or naive, or both.
When I retired in 2007 I was advised by HMRC and my IFA that my Life Time Allowance or 'pension pot' was limited to £1.6 million by law. That is, nobody can accumulate personal and/or company contributions to ones final pension fund more than this amount - out of which one can take out annuities at the prevailing rate (in 2007 approx 6.25% which would have generated an income of £100k pa)
I don't have anywhere near this amount but then I was just a humble engineer.
My simple mind tells me Goodwins LTA must be more than seven times this amount in order to generate an income of £730k pa.
Where did I go wrong? Is there one law for bankers and one law for the rest of us? Have I made a mistake somewhere? Am I stupid?
Perhaps someone from HMRC could reply to this.
Complain about this comment
Oh, I get it, this is the first stage of quantitative easing. The New Money has to get into the system somehow. So why not all of it via Fred's pension pot?
Come on Fred, spend, spend, spend, and you can single handedly kick start the rest of us out of recession.
Complain about this comment
All you 98% taxers.
I would love 2% of 16,000,000
Complain about this comment
120
You've given me an idea. If you can't beat them, join them. Given the tenacity in which Fred has hung onto that pension, how about putting him in charge when the French try to do us over at the next EU rebate negotiation ?
With his tenacity the billion quid would be ours in no time. I can't see Gordon doing a better job. We could promise him a million if he's successful at bringing back the dosh and offering no concessions.
Board members of large banks take note of how I have aligned success with reward. I won't charge you £50k for the consultancy - it's free this time.
Complain about this comment
#126
Spot on. They did not earn the profits over the past years, therefore the accounts and bonuses should be recalculated and bonus overpayments repaid....Ian
Complain about this comment
Perhaps I will wake up on the 22nd of June and find its still the 22nd of June 2008 and this has been a nightmare
After all there is nothing in what I am seeing, hearing or reading that can possibly be really happening in a 21st century society of talented knowledgeable enlightened and experienced people from all walks of life – is there
And I know it’s a dream because whatever you do you cant print a pound sign £ on the BBC’s website nor an apostrophe either so dream on we will all wake up to some sort of reality one day.
Is that a unicorn I see heading through the mist no my mistake it’s the Chancellor of the Exchequer with a party hat on.
can I have a large tax free sum please to retire on
Complain about this comment
Just how do you bring a corrupt government to book?
Complain about this comment
Robert:
The latest nugget about Sir Fred's oh-so-lovely pension arrangements are that he has taken a £2.7m cash lump sum from his pension pot.
So, what; Fred Goodwin decided to have RBS to pay the taxes of his money...Instead of him....
~Dennis Junior~
Complain about this comment
A rhetorical question!...How do you bring a corrupt government to book?
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
This comment was removed because the moderators found it broke the House Rules.
Here is a first for me - speaking up for one of this governments minister! Lord Myners only mistake was taking as a given that the RBS board faced with the reality that they had presided over one of the largest business failures of all time would grasp the enormity of the situation and do all they could to minimise the fallout. That fatefull weakend one would guess that Myners felt that he could at least leave that to the former great and the good that sat on the RBS board. But alas the dicredited members of the RBS executive could not even be trusted with that! They insted adopted a bunker mentality and bizzarely decided to ease Goodwin out of his post. Lord Myners can surely be forgiven for not realising how disfuctional the board had become and that they would proced to behave in such a truly disgraceful fashion.
Complain about this comment
"And if you were an investor in them, or a creditor to them, you'd be grateful for their luck - that they hitched their fortunes to a business, AIG..."
Could you say how many of us are in the category of investors/creditors please?
Is it true that most people who paid for their existence, and who bailed them out, were not either investor or creditor?
Complain about this comment
@ Connem good question! I think you will find the board of RBS agreed (probably at the time of Goodwin's appointment)to provide Goodwin with a pension as if the cap did not exist. These type of arrangements are, i believe, unfunded and paid each year out of the banks ongoin 'profits'. I also read today that they granted him years earnt as if he joined the company at the age of 20 rather than his actual joining age of 40. If this is correct Goodwin is drawing a pension which refects 40 years of working at RBS rather that the 10 years he actually put in. Not sure when he was given the extra 20 years for 'joining' at 20. But cleary such genorisity is not extended to the likes of you and me!
Complain about this comment
Labour are surely to be congratulated on the way they have managed this Goodwin pension saga? I am watching the BBC 10 o'clock news just now and it is the 4th item from the top!
Is the real story the fact that Goodwin has taken a lumpsum up front or should we really be reading about a masterclass in drip feeding tit bits of the bigger story in a piecemeal fashion by the Government?
First we learn that the Government bought RBS shares at a level which if they had looked at the books several weeks later bore no representation to the huge losses that had at that point (surely at least been somewhat foresighted but) not yet written down. Then we are told that Goodwin has a sweet deal on his pension. Then we are told that the government will "do all we can" to ensure he gives it up (who are they kidding), then the amount of pension is discosed and as the dust settles, we now hear today that a lumpsum was taken by Goodwin as part of the deal.
Is Gordon Brown reading the "Goodwin's tax break" headline on the BBC first time? Surely the government have had full details of the pension/exit settlement for some time now - if not - why not?
Of course what is more puzzling is that those on the other side of the commons have not already got answers to these questions from the government. Thankfully from Gordon Brown's point of view, Lord Myners will shoulder the focus on this. Blair earned the nickname Teflon Tony but Brown (and his advisors) should be congratulated on thier efforts to date.
Complain about this comment
So, Lord Myners is puzzling you. Start with the job he was asked to do. He is Alistair's point-man with the banks and City. He told The Guardian "I was asked to support discussions that would shape a deal to recapitalise some of our largest banks, inject liquidity into the system and unfreeze the interbank lending market that feeds mortgages and loans to small business." In representing HMG's new share interests, did this include sweeping out the old guard bearing in mind announcements were to follow at the Stock Exchange.Confidence in RBS was collapsing, wasnt it?
He says he talked to Sir Fred on him giving up his notice entitlement and share award rights on departure. If his role did not include getting rid of the old guard, what was he doing discussing these matters ? If his role did include this, why doesnt he accept responsibility for the ensuing debacle?
Complain about this comment
No. 136 connem - to get benefits in excess of £1.6M you apply for enhanced protection of benefits earned before April 2006 and then it is exempt from the new regime.
To the main point - Robert has got thi slump sum all wrong. Anyone retiring is entitled to a Pension Commencement Lump Sum of up to 25% of his fund - Fred seems to have got less. By taking this PCLS from a defined benefit scheme (Final Salary) the pensioner loses benefit at a ratio of 10 - 1 or so. Being tax free does not mean that your employer pays the tax on your behalf - it is just not taxed. In fact if RBS have topped up the fund to make the payment it is a tax allowable expense.
Let's get your pension knowledge right before you go exagerating what has happened.
Fred has taken benefits just like any other person and has taken his Tax Free Cash - just like anyone else. The rules that govern pension schemes are the same for everyone - whether your pension is £6,900 a year or £690,000.
I may not like FG or what he has done to my pension fund but he has not broken any rules - and that is that.
BTW - subject to discuss - should Gordon Brown PM get a smaller pension because he sold of our gold reserves at $300 - or doesn't that count?
Complain about this comment
#136
You can have a pension fund (pot) bigger than the lifetime allowance. If you do, you pay more tax on the excess, if the scheme is an approved scheme which attracts tax relief on employer and employee contributions.
If the scheme is unapproved, the rules are different. I believe no tax relief but no lifetime allowance either.
Previously, it was indicated that this was an unapproved scheme.
Complain about this comment
You see I am right it’s a dream 141 now comes after 139 but before 140 in the blogs numbering and I am in it.
The blog is begging to take on the banker’s code of numerical ordering that’s a little more for me now, moving figures up the order without reason
Maybe I just forgot the hot malt drink before bed but is that a vision of Sir Fred with a swag bag, striped top and a mask atop Lincoln green hose
Telling the Prime Minister that having spent his years making the nation rich for Gordon to spend on Prudence, he is just taking his little nest egg before the lots gone on those wasteful banks he has had the sense to get out of.
Perhaps the government should do the same as there is now more money to be made in Chinese offshore oil fields.
Complain about this comment
#79 = Regarding your comments, I believe that the case in the US is a Civil case, not a criminal case. Thus I don't believe that Fred, Civil servants et al can actually be forced to testify as they are not US nationals (might restrict the holiday destinations though). I believe that the same applies to extradition - criminal trials as per NatWest 3 only
Even if the US Courts grant juristiction, I believe that RBS is well within its rights to completely ignore the judgement, as it is legally incorporated in the UK. It might lose some of its US Assets, but that might not neceaarily be a bad thing...
I guess the same would apply to Fred's personal assets as well.
Complain about this comment
#136
I'm afraid your IFA didn't quite explain the rules.
There is indeed a lifetime allowance (1.75m at the mo, rising to 1.8m from 2010-2015). However its not a fixed limit on the pot size. For amounts beyond this there are tax charges which I understand equate to a 55% charge on the income.
For those lucky enough to have greater pension pots prior to these new rules there were several 'Protection' rules put in place to cover this, can't recall the exact detail but they normally meant applying to HMRC, recieving a Certificate, and I thought agreeing to no more contributions...
I never really paid attention to that part of the A-Day stuff, as I don't expect to acquire that large a pension. Please correct me where I am wrong
Complain about this comment
Precisely why is RBS director Bob Scott (and others) not being sacked on the orders of the principle shareholder for agreeing to Fred's obscenely gross pension??? ....without them getting pensions / payoffs themselves.
Complain about this comment
In a First, Bankruptcy Judge Rules Calif. City Can Void Union Contracts
http://www.law.com/jsp/article.jsp?id=1202429132330
I find it interesting that we are to uphold the contracts of the very rich and bail them out. At the same time main street is beyond thrown out on the street. A nice double standard isn't it.
Complain about this comment
Funny, we hear less and less of Brown, Darling or even the Tories - are they all on holiday again or are they stunned by the mess we are in and are they all stood like rabbits in the headlights?
Please Mr US President extradite the whole of Parliament and the treasury along with all the bankers
Complain about this comment
how_many_andies, thanks for the explanations in #104.
I am puzzled why Cherie Blair is doing what she is doing. The Blairs have so far got away with much and they have done very well for themselves. She is about to throw it all away. For money? for fame? for vengeance? for ego? RBS probably does a case to answer to its shareholders and to the country but she should not be inolved. A hand formed into a pointed finger has four hidden fingers pointing in other directions - 3 backward towards the accuser. Her husband, and may be even herself, probably have much more to answer, to more people, for longer, than GB. Right or wrong, the case will be seen by many to be Blairs vs UK Plc.
Step away Cherie, step away.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
162,
Securities fraud is a criminal offence ;-) So Gordon et al are in serious bother!
Complain about this comment
I am not sure if Myners is taking us for fools or he is one himself? Firstly he says that it was simple and straightforward for the RBS Board to sack Goodwin - obviously not heard of Employment Law there then and the process they would have had to follow to have a chance of minmising Goodwin's benefits. Secondly, if it was simple and straightforward then why as a minister did he not insist that the RBS Board follow this route? Why, because Gordon's favourite banker would have squeeled and spilt the beans - something the Govt couldn't afford. So do as most of the investment community wanted, get Goodwin out with the minimum fuss even if it meant him walking away from his disasters with plenty of dosh.Of course, now the Govt has been found out and is desperately seeking to deflect all criticism from itself - how surprising that Turner's report on future regulation is coming out today when unemployment goes through the 2m mark. No, Myners did a spellbinding job telling the MPs it was everyone else's fault but him. Another whitewash.
Complain about this comment
There are still ways out for the government from this. RBS is still a limited liability company, so the government can allow it to fail and then pick up the pieces and decide which of its creditors to recompense and which not to. Alternatively, it can pass a "Sir Fred Goodwin tax" into legislation, whereby knights with the name "Fred Goodwin" would be required to pay a 100% marginal tax on earnings over GBP 200,000.
Complain about this comment
Again, why has this 'nugget' emerged now - whose interest is served? Are we really to believe that the Government / current RBS Board have only now found out?
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
Hi Robert
I agree with many of the posters that Fred Goodwin is being used as a scapegoat..
However Lord Myners has a lot of questions to answer. You say that he isn't naive but if he does have his head screwed on what was he doing. Are you implying that there was collusion? Once this started it was plain he was either not competent or naive or of course both. Much more scary than Fred' pension is the £37 billion we gave the banks in that period with Lord Myners as one of our representatives...
Lord Myners seemed when questioned by the MPs to also have the arrogance of many of our political leaders. It doesn't appear to have occured to him that he has a lot of questions to answer and it is more likely than not that he should go.
For those who think this is a smokescreen I present to you Mr Applegarth of Northern Rock who is the person most similar to Fred Goodwin in both actions and retiring with a substantial pension but no-one is chasing him.....
Complain about this comment
As a past director of Nat West which is part of RBS surely Lord Myner's pension pot at RBS would be available to public scrutiny.
Also as a senior member of the RBS pension scheme surely he couldn't argue he didn't know how it worked?
Complain about this comment
Perhaps Sir Fred should take a leaf out of Albert H Wiggin's book. He was a banker in the 1929 crash click on this link to find out more... Go on Sir Fred you know you should do this. http://tinyurl.com/cw6h6h
Complain about this comment
Robert,
There was a very interesting letter in the times the other day stating that there could be a legal case made against the RBS Directors for 'misapplication of RBS' assets' as a route to recovery fred's unwarranted pension.
I hope the very expensive lawyers the taxpayer is going to have to pay for decide such an action is 'do-able' and they include fred as a defendant as I hope mckillop and scott will affirm that fred did not resign as a director of RBS until his outrageous pension deal was agreed between them
Complain about this comment
As they go this seems a fairly easy nut to crack - just tax all pension income over 100,000 pounds at 100%!
I can't see that affecting too many Joe Publics nor too many Labour voters either.
Complain about this comment
'Lifetime allowance' above which a tax charge will apply
* you will now have a 'lifetime allowance' against which the total value of the benefits built up in your pension fund/s by you and/or your employer (including investment growth) will be tested
* the value of any pensions savings above the lifetime allowance will be subject to a 'lifetime allowance charge'; this will apply in addition to the usual Income Tax due on pension payments
* the lifetime allowance for the tax year starting 6 April 2006 will be £1.5 million and will rise each year until it reaches £1.8 million in 2010; thereafter it will be reviewed every five years
* if you take benefits above your lifetime allowance as a pension, the lifetime allowance charge on the excess amount will be 25 per cent
* if you take benefits above your lifetime allowance as a lump sum, the lifetime allowance charge on the excess amount will be 55 per cent
* the lifetime allowance 'test' will take place when you start drawing your benefits or when you reach age 75 (in this case tax would be payable as if you were drawing an income from the pension; you can't take a lump sum once you reach age 75)
Complain about this comment
Why are we surprised? The government have no idea of how to run anything. Each MP get's rewarded year on year for failure, and continue to fail us all. This would most certainly have slipped by without comment but for the informed few that let it out. You need to look no further than the MP's "expenses" issues, where they are of the opinion that the expenses are part of their salary and need to be claimed, not that this is a safety net to ensure that they are not out of pocket, for doing their job. Now they want to ensure that said expenses are not made public??? Why, they are claiming money from our taxes and they should provide satisfactory explanation. My employers will not release money to me without justifation. The Bankers seem to think they are above all that too. I do like the analogy with stable doors and bolting horses. However, when have HMG ever been in the right place, at the right time to slip the catch whilst the beast is contained????
Complain about this comment
At what point do these bonuses, extra pensions, etc, amount to a conspiracy to defraud? In the past juries have been reluctant to deliver guilty verdicts. Would not the opposite apply today
Complain about this comment
As I said in a previous blog on this item, a rookie in HR would have been alert to the details of departing staff packages, so how come these experts missed it? What is going on here? These high fliers are totally inept, and then take no responsibility for any of it. But these people are selected by our representatives who think that we should not know what they spend our money on. Look at the fight they put up to prevent us from seeing their expense and allowence details. They must clean up their own act as well. Frankly we can't afford them!
Complain about this comment
It was Fred Goodwin that brought a highly prosperous and well run organisation to its knees. Whatever he wanted he got no matter what the cost whether it was another bank or a shiny new office (World HQ) in the outskirts of Edinburgh. He was deluding himself and others if he thought his profligacy and the deviation from previous business models would not destabilise the business as it eventually did. He misled the commons select committee when he stated his pension arrangements were the same as any other employee. They were not. I don't know of another employee who receives part of his pension in a lump sum tax free or who is allowed to draw a full pension at 50 or has his pension pot doubled. A standard redundancy package should have been agreed as then any amount over £30K is taxable by HM Customs.
Complain about this comment
I seem to remember that Nick Leeson brought down Barings bank by taking a few risks which unfortunately did not work out properly and got 7 years in jail for that. Treating everyone who does the same equally could concentrate the minds of bank executives and perhaps the banks will not have the same problems in the future.
Complain about this comment
Thank you Robert for sniffing out this nugget. Leaving aside the debate about public money going into a bankrupt bank. Even if RBS had not gone broke, such largess from the board to the chief executive with all sorts of top-ups and income tax payment beggars belief. If this is what the board did for the CE then what other pension arrangements have they made for other executives and board members? What do ordinary RBS workers think about their pension fund being raided to pay for Fred Goodwin and perhaps others? If the pension fund goes into deficit who pays to top it up? Is the deficit caused by excessive payouts to executives?
I think we need a statement from the PBS pension fund trustees.
Complain about this comment
View these comments in RSS