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Employers face pensions rebuff

Pressure by industry to avoid full disclosure of the capital cost of directors' pension benefits looks likely to be rebuffed by the professional body representing actuaries.

The Institute and Faculty of Actuaries is thought to have come down in favour of a tough line that would involve some form of disclosure of the capital value.

It had been asked to draw up a detailed blueprint for implementing the disclosure recommendations of the Greenbury report on executive pay.

The actuaries are still sifting the responses to a consultation exercise in an attempt to find ways to satisfy the diametrically opposed views of employers and pension funds.

The CBI, the Institute of Directors and Sir Richard Greenbury, who chaired the pay committee, have told the actuaries that they favour disclosing only the amount of annual pension payable to a director at retirement age.

This will show the increase in future pension that results from a pay increase in a given year.

But the National Association of Pension Funds has demanded full disclosure of the capital value of a director's pension benefits.

This could force companies to report benefits in the millions when highly paid executives receive large pay increases, and is being resisted by the employers' representatives.

But although the actuaries have formed their own view in favour of reporting capital values, they have not yet put their recommendations to the Government or the Stock Exchange, which commissioned their report. A meeting is expected in the next week or so.

In the absence of a clear consensus, one view is that the actuaries will present their own recommendation, summarise those of industry and the City about what should be done and leave it to the Stock Exchange and the Department of Trade and Industry to make a final choice.

The actuaries may try to allay the concerns of employers about the huge sums that would have to be disclosed by suggesting techniques that would smooth out the big variations in capital value.