Major UK trade union the TUC claims that the average director in the UK's top 100 companies can retire at 60 with a final salary pension worth nearly GBP3 million. The findings, from the TUC's annual PensionsWatch survey, have lead to allegations that directors are protecting their own pensions at the expense of employees.
According to the findings, directors of the UK’s top 100 companies have amassed pensions worth nearly GBP1 billion, with the largest directors’ pensions in each company worth nearly GBP5 million – over 40 times more than most staff pensions.
The biggest final salary pension pot in the survey tops GBP19 million and would pay the director nearly GBP1 million a year, and five directors have a pension worth over GBP12 million. One employer paid over GBP1 million into a director’s money purchase pension last year, and the five biggest payouts to this type of pension top GBP300,000 annually.
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 they would be fairer. It would also help reduce their company pension deficits, said TUC general secretary Brendan Barber.
Investors should demand uniform and open reporting of staff and executive pensions from companies and ensure that the funds of shareholders, including thousands of pension fund members, are not being lavished on luxury pensions that have no link to business performance, continued Mr Barber.