A report published last week by the High Pay Commission into the pensions of company directors shows that the average FTSE 100 director has accumulated a pension worth £3.6 million.
Directors’ Pensions: in it for themselves? shows that, while ordinary workers face a rapid decline in the value of their pensions, executive pension provisions have grown exponentially in recent years.
The report makes clear that while the bosses of some of the UK’s biggest companies have been very good at reducing their costs by cutting the pensions of their workforce, they have excelled at protecting their own.
It found that:
- A FTSE 100 director with a defined benefit pension could expect to receive a median annual pension worth £174,963 on retirement.
- The annual median pension paid from a private sector defined pension scheme was £5,860 for the rest of the work force.
- The average FTSE 100 director has accumulated a pension worth £3.6m.
- The Office of National Statistics survey found that only one third of UK private sector employees receive a company-sponsored pension.
- Only 2.7 per cent of FTSE 100 companies and 2.3 per cent of mid250 companies reported they had no formal arrangements in place for their executive directors.
- Their latest annual reports reveal that almost one quarter of mid250 directors and a third of FTSE 100 directors received a cash pension supplement, either as a standalone provision or in conjunction with other arrangements.
- FTSE 100 lead executives received pension supplements worth £160,817 at the median, while the corresponding figure for their mid250 counterparts was £121,500.
To download the full report, go to the High Pay Commission website.