TUC accuses corporate bosses of double standards in pensions |
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Fri, 09 Sep 2005 19:05
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LONDON: A recent survey of directors’ pensions by the Trade Union Congress could increase workers’ resentment about unfair pension schemes. The TUC report named ‘PensionWatch’ has revealed that the directors of the UK’s largest companies share pension savings of £900m which meant an average of £2.5m – nearly 26 times more than the average pension payout.
In most companies, retirement income for directors was 45 times that of their staff. The TUC said many top corporate executives had replaced generous final salary pensions for their staff with riskier and cheaper schemes; in contrast they were building up enormous pensions for themselves. In effect they were “tightening everyone’s belts but their own” said Brendan Barber, TUC’s general secretary.
According to the PensionWatch report which covered 105 of Britain’s top companies and 100 of the nation’s biggest employers, the average director’s pension, if paid out today, amounted to £167,000 a year. 85 percent of the directors had a final-salary scheme although less than 40 percent of these companies offered final salary plans to all the members of their staff. Another disparity was that directors would earn their pensions rights sooner than their employees.
Although the survey did not name individual organisations and their executives, it was easy to see who among the top bosses had the largest (or most generous) pension funds: at top slot would be BP chairman Lord Browne who would get £944,000 a year. Ranking next to him would be Niall Fitzgerald, who recently retired from Unilever with a pension payout of £852,000 a year.
The CBI’s deputy director general John Cridland defended the pension packages for top bosses but agreed with the TUC’s view that “all employees should have equal access to pension schemes” and that directors should not have special access terms.
The TUC's survey was spurred by employers’ concern about the cost of final-salary pensions. Most top employers have already stopped offering such schemes to new recruits. In recent years, the TUC has been fighting to protect workers’ pension rights and to force companies into contributing compulsorily towards their staff’s pension schemes.
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