The TUC has called for an end to pensions double standards after its PensionsWatch report revealed that directors of the UK’s top 100 companies share pensions worth almost £900m.
The analysis of boardroom pensions shows that the top director’s pension in each company is worth an average of £4.5m.
If a defined benefit (ie, final salary) pension for a director were claimed now, it would pay out £167,000 a year.
For the directors with the biggest pensions, the average would be £288,000 a year – 45 times the average for all employees.
TUC general secretary Brendan Barber, said: “Too many directors have closed decent final salary pensions for staff and replaced them with cheaper and riskier schemes. Meanwhile directors have continued to build up enormous pensions as they tighten everyone’s belts but their own.
“Top directors already get huge salaries. There is absolutely no reason why they should not be in the same pension scheme on the same terms as their staff. It’s time to end pensions double standards,” he said.
PensionsWatch recommends that:
directors and employees should be members of the same pension schemes and directors should ‘set a good example’ as advised by the CBI
company reports should contain clear information on pension schemes including accrual and contribution rates, and any differential treatment for directors
compulsory minimum pension contributions from employer and employees should be phased in to ensure that all working people are saving enough for retirement.