TUC hits out £3.9m size of FTSE 100 directors' pensions

A Trade Union Congress (TUC) pensions report has hit out at FTSE 100 company directors taking pensions of on average £3.9 million, worth 23 times the average worker's scheme.

The ninth annual PensionsWatch looked at 362 FTSE 100 directors. It puts the average value of a director’s defined benefit (DB) pension at £4 million, providing a guaranteed yearly income of £224,121 in retirement.

The biggest pot in this year's survey was worth £21.5 million.  TUC general secretary Brendan Barber (pictured) said: 'This survey highlights the real pensions scandal in Britain today.’

'Not content with trousering huge pay and bonuses, often without any link to their performance, top directors are also rewarding themselves with seven digit pension pots. Worse still, some of these companies have cut back or even closed pension schemes for their staff.’

The TUC said this means director's pensions were on average 23 times larger than the average occupational pension of £9,568, and 34 times bigger than the average public sector pension income  of £6,497 a year.

The report also revealed that most companies still provided DB schemes to at least some of their directors despite having replaced the scheme with defined contribution (DC) arrangements for the rest of the workforce.

However, for the first time the minority of directors are in DB schemes.

Barber said: ‘The financial crash has put the issue of pay and bonuses firmly in the spotlight, but fat cat pensions are still shrouded in secrecy. The government must force companies to disclose directors' pension arrangements so that they can be scrutinised by both shareholders and staff.'

Darren Philip, director of Policy of the National Association of Pension Funds, backed the call for greater transparency to ensure pensions did not become a ‘back door’ reward for poor performance.

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