The pensions’ gap between top company directors and everyone else appears to be widening, according to research.
The TUC’s PensionsWatch survey, which analyses the pension arrangements of 351 FTSE 100 directors, revealed that their average occupational pension was a huge 24.4 times larger than the average UK workers’ of £9,929.
Of the 144 senior executives who still had a defined benefit pension pot, the fund had increased by a huge £400,000 over the last year to hit £4.33 million – or an annual average pay out of £240,191.
The data was published today in advance of the union umbrella organisation’s annual Congress next week, where the entire pensions issue is expected to be a hot topic.
General secretary Brendan Barber said: “The gap between the pensions of top directors and everyone else does not just reflect the excess of the super-rich, but shows just how poor pensions are for ordinary workers in the private sector, where more than two out of three get no employer pension help.”
Auto-enrolment should help the situation, however, as it would mean that many employers had to contribute to staff pensions for the first time. “But we need to see employers offering more than the bare minimum if we are to avoid a growing pensioner poverty crisis,” Barber added.
The study found that the average company contribution to directors’ defined contribution pensions was £144,508 or 22% of their salary, a figure that stood at nearly four times the contribution rate ascribed to employees lower down the food chain (6%) and more than seven times that required under auto-enrolment.
In addition, the most common Normal Retirement Age for senior executives was now 60 compared with 65 for regular workers, although the gap was expected to widen still further over the next few years.
