Top UK bosses get £3.8m pension pots

The directors of the UK’s top 102 companies accrue pension pots of £3.8m on average, a study by TUC PensionsWatch says.

It represents an increase on £400,000 on the average transfer value for a director's pension last year.

This year's largest pension pot is worth £21m, paying out £1.3m annually. The average director's pension is now 26 times the average occupational pension, which is £8,736.

Just over half the directors surveyed are still in final salary schemes, despite the move away from defined benefit for the majority of staff.

With directors in defined contribution schemes the average company contribution is £134,760 with an average contribution rate of 18%. For directors who do not participate in company schemes, one in three received cash payments, on average £130,906, in place of participation or as top-ups.

"Employers often tell us that decent staff pension schemes are no longer affordable," says Brendan Barber, TUC general secretary.

"Directors' representatives are in the vanguard of those attacking public sector pensions, yet greed is still good in the nation's top boardrooms where directors continue to reward themselves with seven figure pension pots.

"Top bosses justify their pensions, pay and bonuses as rewards for success, yet many companies refuse to fully disclose these lavish arrangements either to shareholders or to their own members of staff.

"While boardrooms are still paved with pensions gold, most staff now get no employer pension support, and even the minority who do have seen big cuts in pensions provision as schemes have closed or had benefits reduced.

"Companies should offer all their staff the same pension arrangements and put an end to this unfair two-tier pension system."

NAPF chief executive Joanne Segars says: "While it is logical that higher earners will accrue bigger retirement pots, we have some real concerns about this issue. Investors may have questions about fairness if boardroom pensions are much more generous than those on the shop floor.

"Special arrangements like lower retirement ages and higher contribution rates need to be explained. We need much more transparency in this area.

"It is also worrying that directors' pensions are not usually linked to performance. This could mean bosses are rewarded in their retirement despite failure in the job. Pensions must not become a back-door to boosting pay."