Letter: How the fat cats get the cream

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THE EFFECTS upon senior directors' 'final pay' pensions of huge salary rises are perhaps more scandalous than the increases themselves ('Thin excuses for fat cats', 6 March). If a scheme member's final pay is pounds 750,000, that translates into a two-thirds pension of pounds 500,000; to buy an annuity of that amount, indexed, would cost approximately pounds 10m nowadays. So if, five years ago, this high- flyer had been paid a mere pounds 375,000, his meteoric rises will have resulted in an additional 'earmarking' of the fund of some pounds 5m capital cost.

His own 5 per cent of salary contributions to the fund will not have gone far towards this; the balance of cost must have been found from shareholders, and to a massive extent, by the taxpayer at large via the scheme's tax exemptions.

A F Smallbone

London NW11