£175,000 pensions for top directors
FTSE 100 directors receiving pensions up to 29 times higher than rest of the workforce.
Today, the High Pay Commission (HPC) released a report highlighting the growing private sector divide in pensions between those of directors and the rest of the workforce.
"Directors' Pensions: in it for themselves?" reveals that the average FTSE 100 lead executive with a final salary pension scheme can expect to receive an annual pension worth almost £175,000 on retirement. In contrast, the annual average pension paid from a private sector final salary pension scheme is £5,860 for the rest of the workforce.
The divide between directors and other employees is also prevalent in the wider FTSE 350 companies: over 97 per cent of FTSE 350 executive directors have formal company-sponsored pension arrangements but only one third have stayed open for other workers.
This information is released at a time when many employee pension schemes are closing or getting smaller. Data from the Office for National Statistics indicates that the lowest paid workers are least likely to be members of occupational pension schemes.
HPC chairwoman Deborah Hargreaves said on the Today Programe this morning:
This has been going on for some time; lots of company pension schemes are being closed to the wider workforce while directors have looked after themselves.
She insisted that despite changes in tax relief for top rate pensions, the government should look at further changes where higher rate taxpayers are concerned.