UK - Bosses at UK companies are enjoying pension schemes worth up to 50 times those of other workers, according to a TUC PensionsWatch report released today.
The report claims many directors continue to enjoy luxury pensions with guaranteed pay-outs (DB schemes) worth more than 26 times the national average, despite having closed such schemes to their staff.
A TUC statement said the report revealed directors of the UK’s top companies share DB pensions worth £750m, with each director’s on average worth £2.15m.
The average director’s DB scheme would pay out £169,000 a year if claimed now and for directors with the biggest pension at each company, the average is £303,000 a year, nearly 50 times the average for all employees.
The TUC says the double standards set by employers defy a call by CBI in 2003 for businesses to “set a good example” on employee salaries and pensions.
TUC general secretary Brendan Barber commented: “Employees in every sector have seen their pensions under attack in recent years, but few of those making the decisions show any willingness to sacrifice their own pensions.
“Fat cats are still supping the pensions cream, and have taken little or no notice of business leaders or ministers who say they should set an example.”
The report found more than 80% of the directors in the study have DB pensions but only 40% of companies still have an open DB scheme for new employees. New staff must join money purchase or defined contribution schemes (DC), where their pension will depend on the ups and downs of investments.
Where directors hold DC schemes, the average employer contribution is £80,000, about 20% of salary, compared to the average employer contribution to staff pensions of just less than 6.5% of salary.
The report examined the staff and director pension provisions at 127 of the top UK companies, a combination of the FTSE 100 and largest 100 employers by the number of employees. Details were recorded for directors with DB pensions at 89 companies, directors with DC pensions at 26 companies and staff pensions at 110 companies.
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