The Royal Bank of Scotland Group (RBS) is to inject more than £800 million of tax-payers’ money into its employees’ pension schemes which have fallen into deficit after investing in RBS shares.
According to its annual report, the bank plans to invest £807m in order to fund its various pension schemes. This includes the pension pot of former chief executive Sir Fred Goodwin, which the report confirms rose from £8.3m to £16.3m when he left RBS in November 2008.
The pension funds have fallen from a surplus of £115m into deficit of £1.99 billion in the past 12 months because of falling stock markets.
A spokesman at RBS also said the amount needed to fund the pension schemes had risen sharply following the acquisition of ABN AMRO, whose defined benefit (DB) pension scheme is now being fully funded by RBS.
The RBS final salary scheme was closed to new members in 2006, with around 65,000 staff still accruing benefits, while the main fund has another 165,000 pensioners and deferred members.
This comes at a time when Ann Clwyd, a backbench Labour MP, is reportedly set to propose the Bankers Pensions (Limits) Bill, which will call for former executives of banks that have been bailed out by the government to have their pensions capped.