Trade unions attack executive pension funds worth millions

Top bosses' pensions are set by committees of other people who are, or have been, top executives at big companies

The average director of a FTSE 100 company now has a pension pot worth £3.9m, the TUC's annual PensionsWatch survey will say today.

According to the survey – covering 362 directors of FTSE 100 companies in Britain – that would provide a pension of £224,121 compared with the average occupational pension of less than £10,000.

The survey also found that despite the wholesale closure of defined benefit pensions – which guarantee pay outs of a percentage of an employee's final salary – across British industry some 58 per cent of companies still provide these schemes to at least some of their directors.

More directors are being moved to defined contribution schemes – in which pensions are based on investment performance – but the PensionsWatch investigation has found that the average company contribution increased by £26,000 on last year to reach £161,149. For executives with the highest contribution in the company, the average company amount paid in is £211,859.

And the most common normal retirement age (NRA) is 60 for directors, with three times as many directors able to retire at 60 than 65. For most workers it is 65, and that is likely to rise.

The TUC will also angrily criticise the way top bosses' pensions are set by remuneration committees made up of other people who are, or have been, top executives at big companies.

Among the directors whose contracts were studied were John Varley, the former Barclays chief executive, who has the second biggest pension pot within the survey at £18.256m. He sits as chairman of the remuneration committee of AstraZeneca, the pharmaceuticals giant, whose chief executive David Brennan has the fourth biggest pension pot with £14.7m.

The figures are likely to provide further impetus to the debate in Britain over the widening gap between the haves and have nots, with a small elite at the top of business and the public sector able to command enormous pay and pension packages amounting to huge multiples of what the average worker enjoys.

The TUC's director-general Brendan Barber said the survey highlighted what he called "the real pensions scandal in Britain today".

"Public sector workers are rightly furious about being told that their pensions of just a few thousand pounds are 'gold-plated' and unaffordable by the same business leaders who stay silent on the multi-million pound pensions that many enjoy themselves," Mr Barber added.

AstraZeneca said: " David Brennan's accrued pension reflects the fact that he has spent 35 years with the company, and during that time has held roles at the very highest levels of management. He is a member of the pension plan that was in place at the time he joined the business in the US... and his pension formula is no more valuable than that of other employees in that scheme."

Top 10 fat cat pension pots

1. Jeroen van der Veer, Royal Dutch Shell, £21,555,450

2. John Varley, Barclays, £18,256,000

3. Frank Chapman, BG Group, £16,574,000

4. David Brennan, AstraZeneca, £14,711,000

5. Paul Walsh, Diageo, £13,481,000

6. Gareth Davis, Imperial Tobacco Group, £12,800,000

7. Byron Grote, BP, £9,999,853

8. Nicandro Durante, British American Tobacco, £9,840,627

9. Andrew Witty, GlaxoSmithKline, £9,651,000

10. Sir John Rose, Rolls-Royce, £8,828,000

Independent Partners: 10 top tips for retirement. Get your free guide here

News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

    Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

    £50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Ashdown Group: Training Programme Manager - City, London

    £40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

    Day In a Page

    NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

    Who's monitoring the outsourced NHS services?

    A report finds that private firms are not being properly assessed for their quality of care
    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
    How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

    How do Greeks feel about Syriza?

    Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
    From Iraq to Libya and Syria: The wars that come back to haunt us

    The wars that come back to haunt us

    David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
    Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

    Too busy to surf? Head to The Pool

    A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
    Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

    UK's Major Tum to blast off on a spice odyssey

    Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
    John Harrison's 'longitude' clock sets new record - 300 years on

    ‘Longitude’ clock sets new record - 300 years on

    Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
    Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

    Let the propaganda wars begin - again

    'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
    Why Japan's incredible long-distance runners will never win the London Marathon

    Japan's incredible long-distance runners

    Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
    Why does Tom Drury remain the greatest writer you've never heard of?

    Tom Drury: The quiet American

    His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
    You should judge a person by how they peel a potato

    You should judge a person by how they peel a potato

    Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
    Beige is back: The drab car colours of the 1970s are proving popular again

    Beige to the future

    Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
    Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

    Bill Granger cooks with fresh cheeses

    More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
    Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

    Shay Given: 'This FA Cup run has been wonderful'

    The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
    Timeless drama of Championship race in league of its own - Michael Calvin

    Michael Calvin's Last Word

    Timeless drama of Championship race in league of its own