A belated welcome to last week’s publication of the TUC’s annual PensionsWatch survey.
This is a really useful reminder of the true nature of the pensions divide in the UK – not between public sector and private sector, but between the pensions of senior executives and everyone else. Among the findings of the 2010 survey, we find that the value of the average executive pension pot has increased by 11.7%, to £3.8m – a sum that would deliver an annual pension of over a quarter of a million, some 26 times the average occupational pension in payment. Over half of all directors in the survey are in defined benefit schemes (a percentage coverage reached among employees in general in 1983, since which time it has fallen back to less than one-third), even though many such directors retain such provision despite having closed it for many of their staff. And the average contribution into an executive’s defined contribution scheme was 19% – three times the average for shopfloor workers. For executives not in a scheme, the average cash payment was £120,000.
As Brendan Barber pointed out, directors have been in the vanguard of attacking pensions provision in the UK, via its so-called ‘independent‘ pensions commission with the Institute for Economic Affairs, while a more fair and reasonable approach would be one based not just on greater transparency of executive pension arrangements but a common scheme for all in the organisation. Not least since taxpayer support for executive pensions is so huge. The point is not lost on Joanne Segars, of the National Association of Pension Funds, which has ‘real concerns‘ about the issue on the grounds of fairness. Real change, however, is likely to require a somewhat stronger intervention.
On top of today’s research showing that executive bonuses are back to pre-recession levels, the notion that it’s business as usual in the boardroom, regardless of what is going on elsewhere in the economy, is one that increasingly seems to define our modern age.