UK - Contributions into executive pensions have grown by 70% in the last five years while those for ordinary employees have fallen, new research shows.
Companies put more than £5bn into executive pensions in 2001, a 70% increase on the £3.1bn in benefits executives took home in 1997, the report by market research firm Key Note, claims.
At the same time, the amount going in to workers’ schemes has fallen by more than 56% – from £1.2bn in 1997 to £523m in 2001.
The report’s editor Simon Taylor said: “Shareholders and ordinary workers are likely to be stunned by the huge amounts executives are diverting into their own schemes, in what amounts to raids on future company profits.”
TUC general secretary-elect Brendan Barber said: “Executive excess will push shareholders and employees to increasingly challenge companies’ double standards to staff pensions.”
He added: “As for the inevitable rush of executives looking to avoid the new tax limit, the sooner the new levels are in place, the better.”
Key Note’s findings follow consultants’ predictions that executives will race to boost their pensions before the government’s £1.4m savings limit comes into force in April 2004.
In this week's Pensions Buzz, we want to know if The Pensions Regulator (TPR) is taking the right approach by naming and shaming schemes which breach their auto-enrolment (AE) duties.
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