date: 31 August 2008

embargo: 00.01hrs Tuesday 2 September

UK top bosses can look forward to retiring on £200,000 a year

Directors of the UK's top companies can retire on pensions of over £200,000 a year, according to the TUC PensionsWatch survey published today (Tuesday).

The TUC's sixth annual PensionsWatch survey, which analyses the pension arrangements of 346 directors from 102 of the UK's top companies, shows that top bosses have amassed pension pots that average around £3 million each, providing an annual pension of £201,700 a year - 25 times the average workplace pension that ordinary workers receive (£8,100). Directors with the greatest entitlements at each company have average pension pots of £5.2million and can expect a pension of £333,400 a year.

PensionsWatchreveals that bosses have bucked the trend towards riskier and less generous pensions for ordinary workers, with three quarters of the directors surveyed (76 per cent) on defined benefit (DB) schemes.

The survey found that directors in defined contribution (DC) schemes received an average employer contribution of £91,700. The average employer contribution rate was around 21 per cent, three times the average rate for ordinary workers in this type of scheme (around 6.5 per cent). The top directors with the highest pension payments at each company received an average employer contribution of £149,600.

While many employers across the public and private sectors are increasing the length of time people have to work by raising retirement ages to 65, the majority of directors in the TUC study are still able to retire at 60. Of the 40 companies that provided information about the normal retirement age (NRA) for directors, two thirds (26 companies) still had a NRA of 60.

The PensionsWatch survey also uncovered a lack of transparency in the reporting of directors' pension arrangements. Of the 19 financial sector companies analysed - 18 of which offered DB schemes to at least one director - just four companies disclosed the accrual rate they use to calculate pension benefits.

The TUC is calling for greater clarity and reporting of pay, remuneration and pensions, so that investors have the information they need to scrutinise the awards made to directors. The TUC believes that more information would also make it easier for ordinary employees to see the pension arrangements of their top bosses.

TUC General Secretary Brendan Barber said: 'As ordinary workers have their pensions schemes closed and are expected to work for longer, the UK's top bosses are avoiding this collective belt tightening and retaining their gold-plated pensions.

'Top bosses justify their lavish pay and pension arrangements on the risks they take and the rewards they deserve for success. But these credit crunch-busting retirement plans seem to exist in a different world from the economic squeeze that is affecting everyone else's pensions.

'Many of the most lucrative pension arrangements are shrouded in secrecy, making it hard for investors to scrutinise them and ensure that bosses are accountable. If top directors can really justify their rewards they must be bolder in declaring their pay and pensions to investors and their staff.'

NOTES TO EDITORS:

- According to the 2006/7 Pensioners Income Series study (Department for Work and Pensions), the average occupational pension is £8,111 a year.

- The average employer contribution rate to private sector occupational defined contribution (DC) schemes is seven per cent for closed schemes and 6.4 per cent for open schemes.

- PensionsWatch 2008 can be downloaded at www.tuc.org.uk/extras/PensionsWatch2008.pdf from 00.01hrs Tuesday 2 September. Embargoed copies are available from the TUC press office.

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

- Register for the TUC's press extranet: a service exclusive to journalists wanting to access pre-embargo releases and reports from the TUC. Visit www.tuc.org.uk/pressextranet

- Congress 2008 will be held at the Brighton Centre, Brighton from Monday 8 September to Thursday 11 September. All applications for media passes must be received no later than noon Tuesday 2 September. Any applications received after this date will be processed in Brighton and subject to a £50 administration fee. The form for media credentials, plus information on how to book wireless internet access and a phone line at the Brighton Centre can be accessed at www.tuc.org.uk/mediacredentials

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Brenchley T: 020 7467 1337 M: 07900 910624 E: ebrenchley@tuc.org.uk

Press release (800 words) issued 2 Sep 2008