The Trades Union Congress (TUC) condemned Britain's "two-tier" pension system yesterday as its research showed the pension pot of the average FTSE 100 director swelling more than 10 per cent to £4.3m last year.
Its 10th PensionsWatch survey, which analyses the pension arrangements of 351 FTSE 100 directors, found the average transfer value of pension pots rose by £400,000, providing an annual pension of £240,191 – more than 24 times the size of the average occupational pension, which stands at £9,828.
The chief executive of BG Group, Sir Frank Chapman, has accrued the biggest pension pot, at £19.4m, according to the report. AstraZeneca's David Brennan, who quit as chief executive under pressure from shareholders in April, is entitled to the biggest annual payout based on previous service of £978,000 a year, the TUC says.
The increasing largesse of directors' pensions forms a sharp contrast with the fortunes of the rest of the country, with the number of employees saving in employer-backed schemes falling every year. According to the Office for National Statistics, the number of workers in occupational pension schemes fell from 10.1 million to 8.3 million in the decade to 2010. For workers in the private sector the situation is even bleaker, with just three million active members of pension schemes two years ago – 5.7 million paid into schemes in 2000.
Brendan Barber, general secretary of the TUC, said: "Companies continue to chip away at the pensions of ordinary workers while awarding their directors solid-platinum pensions worth hundreds of thousands of pounds a year. Top executives already enjoy huge pay packages that go up every year."
FTSE companies paid £144,508 into director schemes and contributed about 22 per cent of their salaries, four times what ordinary workers get.Reuse content