by René Lavanchy
THE TUC has this week accused directors of Britain’s biggest companies of living “in a different world” from the credit crunch, as it published a report revealing they will enjoy average payouts of over £200,000 a year on retirement.
Bosses from 102 leading firms have an average pensions pot of over £3 million, providing them with pensions 25 times bigger than the average occupational pension, according to the latest TUC PensionsWatch report.
And researchers also found that most companies were unwilling to publish full information on the value of directors’ pensions. The TUC argues that the lack of transparency prevents shareholders from assessing how fairly bosses are being rewarded.
General secretary Brendan Barber said: “Top bosses justify their lavish pay and pension arrangements on the risks they take and the rewards they deserve for success. But these credit crunch-busting retirement plans seem to exist in a different world from the economic squeeze that is affecting everyone else’s pensions.
“Many of the most lucrative pension arrangements are shrouded in secrecy, making it hard for investors to scrutinise them and ensure that bosses are accountable. If top directors can really justify their rewards,they must be bolder in declaring their pay and pensions to investors and their staff.”
The best-rewarded directors in each company are set to receive an average of a third of a million pounds’ pension a year. In contrast, the average occupational pension in Britain currently pays just over £8,000. The directors surveyed are also far more likely to have defined benefit schemes – which guarantee a fixed income – than ordinary employees. 76 per cent of directors have defined benefit pensions, despite the increasing rarity of such schemes generally. The number of people on defined benefit schemes fell by 300,000 between 2006 and 2007.
Most companies who provided information also allow their directors to retire at age 60, in spite of many pension schemes recently increasing the retirement age to 65.
