Fingleton’s pension scheme was wound up over crash fears
The revelation may lead to further questions as to why the failed lender did not anticipate the wider property and economic crash which led to it being nationalised.
A newly published report details how Mr Fingleton’s extraordinary pension pot was compiled over his years as chief executive, as well as the controversial €1m bonus he received and refused to pay back.
Mr Fingleton had been a member of Nationwide’s general pension scheme from the time he started working with the institution in 1971 until 1995, when a separate scheme was established for him.
This was known as “Retirement Benefits Scheme (RBS) 2”, and it was a defined benefit scheme based on two-thirds of Mr Fingleton’s final salary.
It rapidly swelled in size, helped by Nationwide’s generous pay policy towards its chief executive and a substantial rise in value of the investments involved. In January 2007, however, Nationwide’s board became concerned about the size of pension payments it would be responsible for if the value of the investments collapsed.
“The scheme was wound up by the trustee (Nationwide) in January 2007,” the report states. “The trustee was acutely conscious the scheme’s assets were heavily invested in equities and these equity investments could sharply decline in value at any time with the resultant deficit having to be financed by the society.”
On wind-up of the scheme, the assets in it were worth €29.4m, and Mr Fingleton was due €27.6m of this under the terms of his pension arrangement.
Assets worth €27.6m were transferred to a new private scheme which Mr Fingleton established himself, called Carezza.
Nationwide’s decision to wind up the scheme proved prescient. Had it not done so, the assets, worth €29.4m in January 2007, would have been worth “less than €4m” by April 2009 because of the crash.
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