When I joined PA Consulting as chief executive in 1992, I was offered membership of its defined-benefit (DB) pension scheme. Although longevity had not reached its present stage — where a 50-year-old, such as Sir Fred Goodwin, can expect to live to 93 - it was clear that we were writing cheques that would be difficult to honour. It seemed unethical to me to impose such a burden on the company, so I declined the offer. Had I accepted, I might now be enjoying the prospect of a Goodwin-style payoff. In 1996 we closed the scheme to new entrants and in 2003 closed it entirely.

What might have happened to PA's DB scheme had I not turned down the chance to be part of it? Would I have found it so easy to close the scheme? If we had not, PA would be facing financial ruin or a severely constrained future.

Although the headlines about DB schemes are mostly about the high cost of payments to chief executives and the like, far more worrying are the collectively greater payment obligations to rank-and-file employees. Complaints against Sir Fred are misdirected. Many, in his place, would take the same stance. Complaints would be better directed to members of the Royal Bank of Scotland board, who kept the scheme open, and to the Mr Goodwin of earlier years — promoted to a position where he could have closed down the RBS scheme but did not. Sir Fred was expert in running a low-cost retail franchise, but he did not, apparently, understand the complexities of investment banks such as ABN Amro and did not, apparently, understand the disastrous financial implications of RBS's generous DB scheme. The only person who could have led RBS into closing its final-salary pension scheme was Sir Fred. How influenced was he by the fact that he was a beneficiary?

Political leaders are hypocritical when they criticise Sir Fred for taking his pension, or threaten changes to the law to recover it, while they insist on generous final-salary pension schemes for themselves and fellow civil servants.

The cost of final-salary schemes in the public sector is massively understated. They originated when people were expected to retire at 65 and die before they were 70. Now, a person who retires at 50 can expect to live for another 43 years.

In many - and possibly most - public sector schemes one can increase the final pension by more than 50 per cent merely by postponing drawing the pension for five years. These schemes impose an unfair cost on future generations and a drag on the public purse as considerable as that created by the banking meltdown. It is true that Sir Fred's pension is unconscionable, but chiefly because the RBS scheme — like all DB schemes — is unquantifiable and most likely unaffordable.

Private sector chief executives and senior political and public sector figures must lead and step away from their participation in such schemes. This is the first step towards the necessary eventual replacement of all private and public sector defined-benefit schemes with defined-contribution schemes. The necessary larger decision — to remove all DB schemes in the interests of shareholders and the citizenry — can then be taken.

Jon Moynihan is executive chairman of PA Consulting Group

Explore Management

• MBA