Directors at the UK’s biggest companies have amassed defined benefit pensions worth an average of £3.9m, with the majority still able to retire at age 60, research from the TUC reveals.
The trade union’s annual PensionsWatch survey, which is based on the pension arrangements of 362 directors at FTSE 100 companies, shows the average director’s defined benefit pension is worth £3.91m.
Some 58 per cent of FTSE 100 firms still provide DB schemes to at least some of their directors, with 145 bosses still being offered DB pension benefits. The TUC says the most common accrual rate is 1/30th for directors, compared with 1/60th to 1/80th for ordinary scheme members.
The research also reveals three times as many directors are able to retire at 60 than 65, while the most common normal retirement age for ordinary scheme members is 65.
TUC general secretary Brendan Barber (pictured) says: “Not content with trousering huge pay and bonuses, often without any link to their performance, top directors are often rewarding themselves with seven digit pension pots.
“Worse still, some of these companies have cut back or even closed pension schemes for their staff.
“The financial crash has put the issue of pay and bonuses firmly in the spotlight, but fat cat pensions are still shrouded in secrecy.
“The Government must force companies to disclose directors’ pension arrangements so that they can be scrutinised by both shareholders and staff.”
National Association of Pension Funds director of policy Darren Philp says: “Boards need to be more upfront about their pension arrangements and explain special features such as lower retirement ages and more favourable accrual rates.
“It is worrying that directors’ pensions are not usually linked to performance. This could mean bosses are rewarded in their retirement despite failure in the job.
“Pensions must not become a back-door to boosting pay.”