Directors of the UK’s top 100 companies have amassed pensions worth nearly £1bn, according to the annual TUC PensionsWatch Survey.
The TUC’s analysis of boardroom pensions shows the average executive can retire at 60 on a final salary pension worth nearly £3m. The largest pension in each company is worth nearly £5m, more than 40 times as much as most staff pensions.
The biggest final salary pension pot in the survey tops £19m and would pay the director nearly £1m a year.
Brendan Barber, TUC general secretary, said: “Britain’s boardrooms and business lobby groups have failed to tackle upstairs/downstairs-style company pensions. If bosses were in the same scheme on the same terms as staff, they would still build up massive pensions compared to employees but these pensions would be fairer. It would also help reduce company pension deficits.
- The average director’s defined benefit pension would pay out more than £168,000 a year, almost 24 times the average occupational pension
- The proportion of directors with final salary pensions has remained at more than 80% since the survey began in 2003, despite the growth in defined contribution schemes for employees.
- More than three-quarters (77%) of companies allow directors to retire on a full pension at 60
- Directors’ final salary pensions are most likely to build up twice as fast as the most common rate for employees in defined benefit schemes, meaning that it would take staff an average of 40 years to get the maximum benefit from their pension, while directors would get there in only 20 years.
The full report is available at www.tuc.org.uk/pensions/tuc-12339-f0.cfm