Senior executives are choosing cash payments over pension contributions in record numbers, the Trades Union Conference has warned.
The Financial Times reports the TUC’s concerns following research it carried out into cash payments in lieu of pension contributions.
The TUC found that among the FTSE 100, a total of £34m was paid in cash to senior staff over the past financial year rather than being paid into a pension.
A record 70 per cent of 316 FTSE 100 directors chose cash over pension saving.
The highest cash sum paid in lieu of a pension contribution was £3.2m, paid to InterContinental Hotel Group chief executive Richard Solomons.
TUC general secretary Frances O’Grady warns this attitude to pension saving could feed down into the kind of pensions companies provide for workers lower down the chain.
She says: “While pension benefits for most workers have been drastically cut back in recent years, FTSE bosses are diverting pension contributions to top up what are already colossal pay packets.
“If senior executives continue to detach themselves from the pension schemes that their employees rely on, they will be less likely to take an active interest in schemes’ quality and adequacy.”
The TUC also found that where pension contributions were made by employers, company bosses would typically get 34 per cent of salary, compared with 6.1 per cent for workers paying into a defined contribution scheme.