Letter: How the fat cats get the cream

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