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
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