Top bosses have amassed pension pots that average £3m each, providing an annual pension of more than £200,000, a survey has revealed.
Trade union body TUC has published its sixth annual PensionWatch study, which examines the pension arrangements of 346 directors from 102 of the UK’s top companies. The findings show that chiefs are set to earn a yearly pension of £201,700 – 25 times the average workplace pension that ordinary workers receive (£8,100).
Some directors have average pension funds of £5.2m – with an annual pension forecast of £333,400.
TUC general secretary Brendan Barber said: “As ordinary workers have their pension schemes closed and are expected to work for longer, the UK’s top bosses are avoiding this collective belt tightening and retaining their gold-plated pensions.
“Top bosses justify their lavish pay and pension arrangements on the risks they take and the rewards they deserve for success. But these credit crunch-busting retirement plans seem to exist in a different world from the economic squeeze that is affecting everyone else’s pensions.”
Three-quarters of the directors surveyed were on defined benefit schemes, with the majority retiring at 60. But the survey claimed a lack of transparency in the reporting of directors’ pension arrangements. Of the 19 financial sector companies analysed – 18 of which offered defined benefit schemes to at least one director – just four companies disclosed the accrual rate they use to calculate pension benefits.
The TUC is calling for greater clarity and reporting of pay, remuneration and pensions so that investors can better scrutinise the awards made to directors.
Barber added: “Many of the most lucrative pension arrangements are shrouded in secrecy, making it hard for investors to scrutinise them and ensure that bosses are accountable. If top directors can really justify their rewards they must be bolder in declaring their pay and pensions to investors and their staff.”