UK - New laws may be needed to clamp down on pre-retirement pension top-ups for executives, corporate governance experts claim.
Pensions & Investment Research Consultants hit out following Scottish & Southern Energy’s decision to put £1.5m more into retiring chief executive Jim Forbes’s pension pot.
PIRC research director Stuart Bell said: “Pre-retirement top-ups are a scam and we certainly wouldn’t rule out legislation if the situation isn’t going to get better.”
Forbes saw his pension transfer value increase by a third to £7.2m after a pre-retirement pay boost and a £114,000 bonus payment. The changes give Forbes an annual pension of £509,000.
But SSE is unrepentant. Communications director Alan Young said: “This is a reward for success. It was the third-best performing utility during the 10 years while Jim Forbes was a director.”
Manifest, the corporate governance and proxy voting specialist said just a 10% swing in shareholder votes against the remuneration report could force SSE to rethink the way it draws up executive contracts in future.
One SSE shareholder, Morley Fund Management, said it was firmly against the practice of increasing executive pay just ahead of retirement.
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
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