Wednesday, 6 August 2008

The UK's most generous pension schemes...

...are in the boardroom of course. This is from Professional Pensions:

40% of senior executives enjoy a 1/45th accrual rate

Some 40pc of senior executives enjoy a 1/45th accrual rate, Xafinity Consulting research shows.

The consultant’s annual executive retirement benefit survey revealed this compared to just 3pc of other employees.

But the study also found that only 29pc of companies surveyed were offering higher level or different types of retirement benefits to its executive directors and senior executives, which is down 15pc from last year.

Xafinity said the increase in demand for self-invested personal pensions was a developing trend, with 25pc of employers now offering the pensions product to their senior executives.

In fact I'm surprised by this. In my experience the bigger companies often offer directors 1/40ths or 1/30ths. I can't see what possible justification there is for this from a shareholder's point of view. Fair enough the people leading organisations are going to get paid more, but that already means higher pensions too. What is the justification for letting them accrue benefits more quickly than other employees? I can't see anything other than greed as an explanation, yet this stuff has been nodded through by remuneration committees for years.

PS. The TUC's most recent analysis of directors' pensions is here (PDF).


Nick Drew said...

OT, but I'm guessing you like this article in todays Grauniad, Tom

that's the thing about us capitalists: not very sentimental about / attached to doctrine, = quicker (relatively speaking...) on the uptake as regards hard evidence, even when we really don't much like it

facts is facts ! & there's money in anything that's real

Tom Powdrill said...

Hi Nick

Yeah I think I agree with you. Ideology matters diddly squat to business people, hence they are able to make relatively quick changes in strategy.

Much of the Left has only really just started properly understanding neo-liberalism at exactly the point some of the foundations are looking shaky.

Interesting article, and the basic point (the Left's absence from the debate) is right in my opinion. But I think there's something stirring out there.