UK's top bosses can retire on £250,000

Friday 11th September 2009

Directors of the UK's top companies can retire on pensions of nearly £250,000 a year, according to a new survey.

Figures published today suggest top pensions have increased by 23 per cent since last year, despite the meltdown of the financial sector and public anger at the bonuses and salaries of top bankers.

The TUC PensionsWatch survey looked at the pension arrangements of 373 directors in 103 of the UK's top companies.

The report shows bosses have amassed pensions worth an average of £3.4 million, providing an average annual pension of £247,785 a year.

Some of the directors can even expect to receive an annual pension of over half a million pounds a year.

The TUC claims the average director's pension is now 30 times the amount of the average workplace pension (£8,320 a year), compared to 25 times last year.

According to the survey, top bosses also continue to buck the trend towards riskier and less generous pensions with 61 per cent of the directors surveyed still on defined benefit (DB) schemes. Just 13.5 per cent of private sector workers now have a DB scheme.

The survey found that directors in defined contribution (DC) schemes receive an average company contribution of £145,200 a year, with a contribution rate of 19 per cent.

The TUC claims ordinary workers have been forced to work longer due to the extension of the retirement age to 65, but most directors are still able to retire at 60.

The TUC has called for greater clarity in the reporting of pensions, in line with better disclosure on pay and bonuses for senior executives, so that shareholders are able to scrutinise directors; pension arrangements and ensure they are fair and reasonable.

TUC general secretary Brendan Barber said: "With more and more people having their company pension schemes reduced, the lavish arrangements enjoyed by the UK's top bosses; now thirty times the value of ordinary workers pensions; are nothing short of scandalous."

"Top bosses justify their pensions, pay and bonuses on the grounds that they are rewards for success. But the stock market nose-dived in 2008 and yet the directors of these same companies have still managed to increase their pensions by over 20 per cent.

"If directors truly believe they are worth every last pound of their pensions, they should make their arrangements better known to both shareholders and their hard working staff, especially to those employees who are seeing their own company schemes slashed."

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