Directors of the UK's top 100 companies have amassed pensions worth nearly £1 billion, according to the annual Trades Union Congress PensionsWatch survey. The TUC's analysis of boardroom pensions shows the average executive can retire at 60 on a final salary pension worth nearly £3 million (£2.7 million). The largest directors' pension in each company is worth nearly £5 million (£4.9 million), over 40 times more than most staff pensions.
The biggest final salary pension pot in the survey tops £19 million and would pay the director nearly £1 million a year, and five directors have a pension worth over £12 million. One employer paid over £1 million into a director's money purchase (or defined contribution) pension last year, and the five biggest payouts to this type of pension top £300,000 annually.
Key PensionsWatch 2006 findings:
- Directors of the UK's top companies share pensions with guaranteed pay-outs (known as defined benefits, DB, or final salary schemes) worth nearly £1 billion (£950 million). On average each director's pension is worth £2.7 million. The average for directors with the largest pension in each company is £4.9 million.
- The average director's DB pension would pay out more than £168,000 a year, almost 24 times the average occupational pension. For the directors with the biggest pension in each company, the average would be over £290,000 a year, over 40 times the average for all employees (£7,124).
- The proportion of directors with final salary pensions has remained at over 80 per cent since the survey began in 2003. Only around a third of UK companies have a salary related scheme open for all employees.
- Over three quarters (77 per cent) of companies allow directors to retire on a full pension at 60.
- The highest annual employer contribution to a director's defined contribution pension was £1,077,882, the rest of the five biggest annual contributions range from £298,000 - £360,000.
The survey is a great piece of research which demonstrates how the capitalist class look after themselves at the expense of their workers. It’s a pity the same determination to look after its members is not shown by the TUC. General secretary Brendan Barber, responding to the survey, said meekly that "'Britain's boardrooms and business lobby groups have failed to tackle upstairs-downstairs style company pensions" and that shareholders should insist that bosses were in the same scheme on the same terms of staff. Not exactly fighting talk, that.
To make it absolutely clear that the TUC was only interested in a kinder, caring capitalism , Barber added: "They would still build up massive pensions compared to employees but they would be fairer. It would also help reduce their company pension deficits." They won’t exactly be quaking in the boardrooms after reading Barber’s pusillanimous remarks.
Paul Feldman, communications editor