UK top bosses can look forward to retiring on £200,000 a year

Directors of the UK's top companies can retire on pensions of over £200,000 a year, according to the TUC PensionsWatch survey.

The TUC's sixth annual PensionsWatch survey, which analyses the pension arrangements of 346 directors from 102 of the UK's top companies, shows that top bosses have amassed pension pots that average around £3 million each, providing an annual pension of £201,700 a year - 25 times the average workplace pension that ordinary workers receive (£8,100). Directors with the greatest entitlements at each company have average pension pots of £5.2million and can expect a pension of £333,400 a year.

PensionsWatchreveals that bosses have bucked the trend towards riskier and less generous pensions for ordinary workers, with three quarters of the directors surveyed (76 per cent) on defined benefit (DB) schemes.

The survey found that directors in defined contribution (DC) schemes received an average employer contribution of £91,700. The average employer contribution rate was around 21 per cent, three times the average rate for ordinary workers in this type of scheme (around 6.5 per cent). The top directors with the highest pension payments at each company received an average employer contribution of £149,600.

While many employers across the public and private sectors are increasing the length of time people have to work by raising retirement ages to 65, the majority of directors in the TUC study are still able to retire at 60. Of the 40 companies that provided information about the normal retirement age (NRA) for directors, two thirds (26 companies) still had a NRA of 60.

The PensionsWatch survey also uncovered a lack of transparency in the reporting of directors' pension arrangements. Of the 19 financial sector companies analysed - 18 of which offered DB schemes to at least one director - just four companies disclosed the accrual rate they use to calculate pension benefits.

The TUC is calling for greater clarity and reporting of pay, remuneration and pensions, so that investors have the information they need to scrutinise the awards made to directors. The TUC believes that more information would also make it easier for ordinary employees to see the pension arrangements of their top bosses.

TUC General Secretary Brendan Barber said: 'As ordinary workers have their pensions schemes closed and are expected to work for longer, the UK's top bosses are avoiding this collective belt tightening and retaining their gold-plated pensions.

'Top bosses justify their lavish pay and pension arrangements on the risks they take and the rewards they deserve for success. But these credit crunch-busting retirement plans seem to exist in a different world from the economic squeeze that is affecting everyone else's pensions.

'Many of the most lucrative pension arrangements are shrouded in secrecy, making it hard for investors to scrutinise them and ensure that bosses are accountable. If top directors can really justify their rewards they must be bolder in declaring their pay and pensions to investors and their staff.'