Directors of the UK’s FTSE 100 companies have built up pension pots worth an average of £4.3 million, according to research by the Trades Union Congress (TUC).
The tenth annual PensionsWatch survey, which analysed the pension arrangements of 351 directors from FTSE 100 companies, found that the average transfer value for a UK director’s defined benefit (DB) pension scheme has increased by £400,000 over the last year, providing an annual pension of £240,191.
The biggest pension pot in this year’s survey is worth £19.4 million. The total value of the 144 directors’ DB pension pots is £600 million.
The research also found:
- The value of the average director’s pension scheme has increased faster than most ordinary pension schemes and is now 24.4 times the size of the average occupational pension (£9,828).
- The average company contribution to directors’ defined contribution (DC) pension schemes is £144,508.
- The average employer contribution rate to a director’s pension (as a percentage of salary) is 22%. This is nearly four times the size of the average employer contribution rate (6%) in DC pensions.
- An increasing number of UK directors now receive cash payments instead of participating in company pension schemes. The average cash payment was £164,925, an increase of £26,489 on last year. The biggest cash payment was £818,594.
Brendan Barber, general secretary at the TUC, said: “The gap between the pensions of top directors and everyone else does not just reflect the excess of the super-rich, but shows just how poor pensions are for ordinary workers in the private sector, where more than two out of three get no employer pension help.
“Automatic enrolment is a great advance as it will make employers contribute to pensions for the first time, but we need to see employers offering more than the bare minimum if we are to avoid a growing pensioner poverty crisis.”