Goodwin offers to 'cut pension by £4m'
Sir Fred Goodwin is offering to cut his pension, months after the government first pushed him to lower the size of his retirement pay-out.
The former chief executive of Royal Bank of Scotland is to reduce the size of his pension pot by £4.7 million - leaving him with a £342,500 a year pension.
Sir Fred has already taken over £2 million out of the pension pot in the form of a lump sum.
RBS chairman Philip Hampton said: "On any measure this represents a very substantial reduction to Fred's pension and is an acceptable amount to all parties to the discussion.
"I am very pleased that we have resolved a situation that has been a difficult and unhappy one for all the parties involved, and it is to Fred's credit that he has done this on a voluntary basis."
Mr Hampton revealed the deal had been held off until the results of an internal inquiry into Sir Fred's management of RBS.
"This inquiry concluded recently, finding that there was no conduct on Fred's part that would justify reducing the pension," Mr Hampton said.
"Fred Goodwin was a respected CEO of RBS during its sustained growth over many years during his time in office. He expressed his deep regret over the position RBS found itself in when the global crisis hit last year and fully accepted his share of responsibility as chief executive."
In February, City minister Lord Myners wrote to Sir Fred calling on him to cut back on his pension.
Sir Fred had claimed the loss of one year's salary he had agreed to when he left RBS was "appropriate and sufficient", and that Lord Myners had agreed to this.
The government maintains the decision not to sack Sir Fred Goodwin but allow him to retire early - and so qualify for a higher pension pot - was made solely by Royal Bank of Scotland and not the Treasury.
The original deal allowed Sir Fred to retire with a £703,000 a year pension.
The government is not expected to accept the offer, hoping Sir Fred would lower his pension to the amount he would receive if he had been sacked.
Faith Dickson, partner at specialist law firm Sacker & Partners LLP, said: "It looks at the moment like this is a re-negotiation of the deal done when Sir Fred left RBS - rather than anyone finding a clever way out of paying the pension that had already been put into payment.
"If this is correct, then it appears to leave in place the legal protections that exist to stop employers trying to take pensions off retired employees, while going some way to recognising that compensation packages should recognise the circumstances in which the person is leaving."
The Sun reports since the crisis erupted Sir Fred has left his Edinburgh home in favour of a villa near Cannes on the French Riviera.
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