The former head of AIB Eugene Sheehy has agreed to take a cut in his pension.

In a statement released to The Irish Times today it is revealed his annual payment will fall from between €300,000 and €325,000 down to €250,000.

The bank confirmed yesterday it was asking former directors to consider taking a voluntary cut to their pensions.

The decision by former head of AIB Eugene Sheehy to forego part of his pension comes following pressure from the Taoiseach.

"Moral responsibility"

Mr. Kenny said the former managers of the lender had a "moral responsiblity" to reduce their retirement entitlements.

In a statement to The Irish Times Mr. Sheehy said he fully accepted the on-going difficulties at the bank and that this was a personal decision on his part.

He left the bank in 2009 after it was bailed out.

The bank began writing to former directors and top executives this week asking them to hand over part of their pensions.

They have chosen the ones who had most responsibility in the run-up to the bank bailout and not just those with the highest pensions.

AIB is also cutting its workforce by 2,500 through redundancy or early retirement.