Prime Minister Theresa May has promised to crack down on highly paid executives who do not support workers’ pensions enough.
In an article for Sunday’s Observer May argues markets need to be rebalanced in favour of ordinary people.
She makes the case on the back of outsourcer Carillion going into liquidation last week forcing the government to guarantee a variety of public services.
The company had a £587m pensions deficit at the end of 2016 and 13 pension schemes with 27,500 members who are being put into the Pension Protection Fund.
In her article May says: “In the spring, we will set out new rules for executives who try to line their own pockets by putting their workers’ pensions at risk – an unacceptable abuse that we will end.
“By this time next year, all listed companies will have to reveal the pay ratio between bosses and workers. Companies will also have to explain how they take into account their employees’ interests at board level, giving unscrupulous employers nowhere to hide.”
Reacting to May’s article, Royal London director of policy Steve Webb says: “The Government is right to criticise firms which pay excessive bonuses or put large dividends ahead of plugging the hole in the company pension fund. But they will find it difficult to convert this concern into workable policies, and there is no ‘silver bullet’ solution.
“Every company is different, and a dividend payout which looks excessive at one firm may be quite sustainable at another. Despite all the concern about the BHS case, nothing has so far changed, and we are probably years away from new legislation coming into force.”