Directors’ £200k pensions

Directors of the UK's top companies can retire on pensions of over £200,000 a year, according to the TUC’s annual PensionsWatch survey. The survey analyses the pension arrangements of 346 directors from 102 of the UK's top companies and shows that directors of the UK’s biggest companies have amassed pension pots that average around £3 million each, providing an annual pension of £201,700 a year - 25 times the average workplace pension that ordinary workers receive (£8,100). Directors with the greatest entitlements at each company have average pension pots of £5.2million and can expect a pension of £333,400 a year.

The report also suggests that directors continue to benefit from generous and less risky defined benefit (DB) schemes, with three quarters of the directors surveyed (76 %) accruing benefits in this type of scheme.

The survey found that directors in defined contribution (DC) schemes received an average employer contribution of £91,700. The average employer contribution rate was around 21% cent, three times the average rate for ordinary workers in this type of scheme (around 6.5%). The top directors with the highest pension payments at each company received an average employer contribution of £149,600.

While many employers across the public and private sectors are increasing the length of time people have to work by raising retirement ages to 65, the majority of directors in the TUC study are still able to retire at 60. Of the 40 companies that provided information about the normal retirement age (NRA) for directors, two thirds (26 companies) still had a NRA of 60.

The TUC is calling for greater clarity and reporting of pay, remuneration and pensions, so that investors have the information they need to scrutinise the awards made to directors. The TUC believes that more information would also make it easier for ordinary employees to see the pension arrangements of their top bosses.

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