Pension pots getting larger for top bosses
Company directors have amassed pension pots worth an average of £3.8m, showing the level of "greed" in Britain's boardrooms, according to a new report today.
An analysis of the pension arrangements of 329 directors from over 100 of the UK's top firms showed that the average value of their pension had increased by £400,000 over the past year, giving them an average annual pension of over £220,000.
The highest paid directors in each company had pension pots worth £5.26m, while the average director's pension was now 26 times the average occupational pension, the TUC said.
The report stated that despite firms continuing to move away from final salary schemes, they were still in place for most top directors, while many bosses were in more than one scheme.
Almost two-thirds of firms provided defined benefit or final salary schemes for some directors, with more generous accrual rates than for other scheme members, the report said.
The TUC also found that while staff were facing the prospect of working longer, with plans to raise the retirement age to 66 in 2016, most directors in final salary schemes had a pension age of 60.
The union organisation called for greater clarity in the reporting of pensions, including the mandatory disclosure of accrual and contribution rates, so that shareholders were able to scrutinise directors' pension arrangements and ensure that they were fair.
Directors and employees should be members of the same schemes and enjoy the same benefits, as is the case in the public sector, the report added.
TUC general secretary Brendan Barber said: "Employers often tell us that decent staff pension schemes are no longer affordable.
"Directors' representatives are in the vanguard of those attacking public sector pensions.
"Yet greed is still good in the nation's top boardrooms where directors continue to reward themselves with seven-figure pension pots.
"Top bosses justify their pensions, pay and bonuses as rewards for success. Yet many companies refuse to fully disclose these lavish arrangements either to shareholders or to their own members of staff.
"While boardrooms are still paved with pensions gold, most staff now get no employer pension support, and even the minority who do have seen big cuts in pensions provision as schemes have closed or had benefits reduced.
"Companies should offer all their staff the same pension arrangements and put an end to this unfair two-tier pension system."