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Ex-RBS boss denies Fred the Shred 'ruse'.

Summary: The former chairman of RBS said City Minister Lord Myners knew about both the size and terms of Sir Fred Goodwin's pension.

The former chairman of the Royal Bank of Scotland said City Minister Lord Myners knew about both the size and terms of Sir Fred Goodwin's pension.

In a letter to the Treasury Select Committee, Sir Tom McKillop said there was "no elaborate ruse" by him or other members of the RBS board to pay Sir Fred more than he was contractually entitled to.

Sir Tom said evidence given by Lord Myners to the committee needed "clarification" and insisted that the minister was told last October that the pension pot would be increased as a result of Sir Fred's early retirement.

During a Treasury Select Committee hearing earlier this month, Lord Myners told MPs that he did not ask Sir Tom and RBS independent director Robert Scott the exact size of Sir Fred's pension during a meeting on October 11.

But Sir Tom said the minister was told in a private meeting that day that the pension would be "the sensitive issue and that it would be 'enormous"'.

He said the following day Mr Scott ran through further details of the arrangement.

Sir Tom wrote: "As well as referring to the undiscounted effect, and the consequence of early retirement and deemed service for the amount of the pension, Mr Scott also gave Lord Myners a range of Au15 million to Au20 million as being Mr Scott's best estimate of what the pension liability might be."

The former RBS chairman - who said he had been moved to write to the committee because "the circumstances relating to Sir Fred's pension have not been accurately represented" - said Lord Myners did ask that Sir Fred give up part of his contractual entitlement to payment in lieu of notice during the discussion on October 12.

He said he believes Sir Fred agreed after direct discussions with Lord Myners.

But he added: "At no stage did Lord Myners or any other representative of the Government ask the RBS directors to attempt to alter any of the contractual terms relating to Sir Fred's pension."

Independent Television News Limited 2009. All rights reserved.

Independent Television News Limited 2009. All rights reserved.

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Publication:Independent Television News Limited (ITN)
Date:Mar 31, 2009
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