Good news - UK directors aren't doing too bad either

[mawilson 2,133]

Unions slam directors’ £1bn pension pot

Directors at some of the UK’s biggest companies have amassed pension pots worth

almost £1bn, spawning a “new group of super rich who float free from the rest of the

society”, according to a trade union study published on Wednesday.

Figures taken from the annual reports of more than 100 companies reveal that the

pension transfer value of an average executive retiring at 60 on a final salary pension

is worth more than £3m, according to the TUC. This was enough to pay a pension of

£193,000 a year, more than 25 times the average occupational pension of £7,500.

Brendan Barber, the TUC general secretary, said that rising inequality driven by “the

huge excess of the rewards available for those at the top of major companies” was

a core issue that needed addressing by government.

Retirement rewards for the highest-paid directors were even greater, he said, with

pension pots rising on average by £400,000 over the previous 12 month to £5.3m –

enough to pay an annual pension of £320,000.

Mr Barber said: “Britain’s boardroom bonanza does not stop on retirement. Too many

top directors have gone on closing or cutting schemes for their workforce, while

keeping gold-plated pensions for themselves.

“Even if top directors were in the same scheme as their workforce they would still

get big pensions because their pay is so much greater than those of the staff they

employ. But this is not enough for many top bosses; they need to have a guaranteed

extra on top.”

John Cridland, the deputy director-general of the CBI, defended big rewards paid to top

executives. He said: “Successful company directors are in demand around the world,

so while big-number salaries and pensions might feel uncomfortable or unfair to some,

cutting ourselves off from the global talent market or taxing high flyers out of existence

would harm the UK’s economy at no benefit to ordinary workers.

“Top executives have often served companies for many years and, like any longstanding

employee, are more likely to be in final-salary pension schemes with earlier retirement

dates – and will have built up sizeable pension pots too.”

The TUC reported that almost 60 per cent of companies had closed final-salary

schemes for new staff yet some 79 per cent of directors still enjoyed final-salary

pensions. The biggest final-salary pension pot, according to the study, was enjoyed

by Lord Browne, the former chief executive of BP. The transfer value of his pension,

according to the company’s accounts, was £21.7m, providing pension of just over

£1m a year.

Five directors, including Lord Browne, had pension pots worth more than £12m, said

the TUC.

The Financial Times