Has Pesto got his sums right? He reported that Sir Fred Goodwin is drawing a pension of £650,000 a year from a pot of about £16m. But if you take account of Goodwin “retiring” at 50, the maths doesn’t seem right.
The FSA’s handy pension calculator shows his total pension pot is closer to £25m. Yes, there’s even more cash for Alistair Darling to claw back.
The extra £9m was spotted by John Ralfe, the pensions consultant, who never seems to tire of fighting pension excess. For those who are interested, these are his workings:
I have used the FSA annuity website to calculate the cost of Sir Fred’s pension.
Age 50. Married spouse age 47, with 50% pension. Non smoker. Increasing with RPI. The best quote is to receive £2,580 a year for a £100,000 lump sum, ie a multiple of 38x.
To receive a £650,000 start pension, age 50, spouse age 47, with 50% pension, increasing with RPI costs £24.7m.
Jim Pickard
Kiran Stacey