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13//09/2009 - Fat cat pensions slammed

Solidarity has condemned the level of fat-cat pensions after the TUC's Pensions Watch report showed large increases. The study of the pension arrangements of 373 directors from 103 companies showed a "growing gap" between the pensions of directors and workers. The average pension of a director at an annual pay-out of £333,400 is now 40 times that of the average workplace pension of £8,320.

 

While ordinary workers are forced to work for longer due to retirement ages rising to 65 for men and women, the majority of directors are still able to retire at 60.

Of the 25 companies that provide information on the normal retirement age for directors, 19 offered retirement at the age 60.

 

The highest-paid directors in each company had pensions worth £333,664 a year, while a small number of bosses would receive more than £1 million a year, said the union organisation.

 

Almost two-thirds of the bosses were still on final-salary pension schemes even though workers were forced into less generous schemes, according to the study.

 

The report also highlighted the way Tax relief was "heavily skewed" towards the better off, with 60% of total relief going to higher rate taxpayers, including 25% - almost £10 billion a year - going to the top 1% of earners.

 

The cost of subsidising the pensions of the richest 1% of the population is more than twice as much as for nurses, teachers and civil servant. Taxpayers were paying £2.50 each on private sector fat cat pensions for every £1 on payouts to retired public servants.

 

Adam Walker, the President of Solidarity, commented:-

"Those high earners will be hit next year under changes announced in this year’s Budget. But there is a strong argument that higher rate relief should be axed altogether, with everyone just getting basic rate relief."

 


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