'Greedy' bosses fill pension pots

An analysis of the pension arrangements of 329 directors from over 100 of the UK’s top firms showed that the average value of their pension had increased by 400,000 over the past year, giving them an average annual pension of over 220,000.

The highest-paid directors in each company had pension pots worth 5.26m, while the average director’s pension was now 26 times the average occupational pension, the TUC said.

The report stated that despite firms continuing to move away from final salary schemes, they were still in place for most top directors, while many bosses were in more than one scheme.

Almost two-thirds of firms provided defined benefit, or final salary, schemes for some directors, with more generous accrual rates than for other scheme members, the report said.

The TUC also found that while staff were facing the prospect of working longer, with plans to raise the retirement age to 66 in 2016, most directors in final salary schemes had a pension age of 60.

The union organisation called for greater clarity in the reporting of pensions, including the mandatory disclosure of accrual and contribution rates, so that shareholders were able to scrutinise directors’ pension arrangements and ensure that they were fair. Directors and employees should be members of the same schemes and enjoy the same benefits, the report added.

TUC General Secretary Brendan Barber said: “Employers often tell us that decent staff pension schemes are no longer affordable. Directors’ representatives are in the vanguard of those attacking public sector pensions. Yet greed is still good in the nation’s top boardrooms where directors continue to reward themselves with seven figure pension pots.”