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date: 10 September 2009

embargo: 00.01hrs Friday 11 September 2009

Top bosses can retire on nearly £250,000 a year

Directors of the UK's top companies can retire on pensions of nearly £250,000 a year, an increase of over 23 per cent since last year, according to the TUC PensionsWatch survey published today (Friday).

The TUC's seventh annual PensionsWatch survey, which analyses the pension arrangements of 373 directors from 103 of the UK's top companies, shows that top bosses have amassed pension pots worth an average of £3.4 million, providing an average annual pension of £247,785 a year.

The highest paid directors in each company have pension pots that would provide an average annual pension of £333,664, and a small number of directors can look forward to an annual pension of over a million pounds a year.

The TUC survey shows that the gap between the pensions of directors and those of ordinary workers continues to grow. The average directors' pension is now 30 times the amount of the average workplace pension (£8,320 a year), compared to 25 times last year.

According to the survey, top bosses also continue to buck the trend towards riskier and less generous pensions with 61 per cent of the directors surveyed still on defined benefit (DB) schemes. Just 13.5 per cent of private sector workers now have a DB scheme.

The survey found that directors in defined contribution (DC) schemes receive an average company contribution of £145,200 a year, with a contribution rate of 19 per cent.

While more ordinary workers are forced to work for longer due to retirement ages rising to 65, the majority of directors are still able to retire at 60. Of the 25 companies that provide information on the normal retirement age (NRA) for directors, 19 offered retirement at the age 60.

The TUC is calling for greater clarity in the reporting of pensions, in line with better disclosure on pay and bonuses for senior executives, so that shareholders are able to scrutinise directors' pension arrangements and ensure they are fair and reasonable.

The TUC believes that directors and employees should be members of the same pension schemes, and be offered the same terms. Companies should make clear any differential treatment for directors, which would make it easier for ordinary employees to see the pension arrangements of their bosses, says the report.

TUC General Secretary Brendan Barber said: 'With more and more people having their company pension schemes reduced, the lavish arrangements enjoyed by the UK's top bosses - now thirty times the value of ordinary workers pensions - are nothing short of scandalous.

'Top bosses justify their pensions, pay and bonuses on the grounds that they are rewards for success. But the stock market nose-dived in 2008 and yet the directors of these same companies have still managed to increase their pensions by over twenty per cent.

'If directors truly believe they are worth every last pound of their pensions, they should make their arrangements better known to both shareholders and their hard working staff, especially to those employees who are seeing their own company schemes slashed.'

NOTES TO EDITORS:

- PensionsWatch 2009 is available to download under embargo at www.tuc.org.uk/extras/PensionsWatch2009.pdf

- According to Government figures, the average occupational pension is £160 per week or £8,320 per year (http://research.dwp.gov.uk/asd/asd6/PI_series_0708.pdf)

- The proportion of private sector workers with a DB pension scheme comes from ONS pensions analysis statistics, available at http://www.statistics.gov.uk/statbase/Product.asp?vlnk=14058

- All TUC press releases can be found at www.tuc.org.uk

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Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
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Press release (800 words) issued 11 Sep 2009