Employers are increasingly levelling out pensions provision to all sections of their workforce.
According to the Executive retirement benefits survey by Xafinity Consulting, only 29% of the organisation surveyed now offer a higher level or different type of retirement benefit to executive directors or senior executives, a fall of 15% on last year.
More than half of executives receive an employer contribution of less than 10%, while more than three quarters receive less than 15%.
When it comes to accrual rates in final salary schemes, however, there is a significant difference between the position of senior executives and other employees. Some 40% of senior executives are on an accrual rate of 1/45, compared with just 3% of other staff.
Xafinity Consulting’s managing director, Robert Birmingham, said: “It is evident from this year’s results that there is a continuing trend towards convergence of benefits for senior executives with those of other employees. With defined contribution (DC) pensions being more widely used for future service provision the true impact of this change on retirement pensions for senior executives may take several years to emerge. However, unless we see substantive increases in DC contribution levels we can anticipate that many senior executives will find that their retirement funds are unable to purchase pensions anywhere near the levels enjoyed by the previous generations of executive.”
A quarter of employers, meanwhile, offer a self-invested personal pension (Sipp) to senior executives.
The annual survey canvassed the views of 3,000 senior HR managers and directors from a range of organisations across the UK.