06 March 2002
Top directors avoid pensions crisis
Hundreds of top company executives are set to rake in six-figure annual pensions while the nation's workforce is gripped by pension panic, according to a survey by Labour Research magazine.
As household name companies queue up to close their employees' final-salary schemes, the survey reveals that 255 directors of FTSE 100 firms have already built up entitlement of over ?100,000 a year in final-salary arrangements.
Some will get much higher sums by the time they actually retire as their entitlement will be based on longer service and higher pay than they have now.
Eighty-four of the 255 would get over ?250,000 a year if they retired immediately, Labour Research finds.
Topping the table is Dr Jean-Pierre Garnier, chief executive of the pharmaceuticals group GlaxoSmithKline. At 53 Garnier is already looking forward to ?833,000 when he retires.
If Garnier stays at Glaxo until retirement his actual pension will based on another seven years' service and probably a higher salary. And, as part of his contract, he will also be credited with an additional three years' service.
Fewer than half of all workers in the UK can look forward to the guaranteed benefits of a final salary scheme, even in companies where directors figure in the Labour Research pensions league table.
The proportion of workers in final salary schemes is set to fall further as a result of the current crisis. FTSE 100 companies that have already switched from final salary schemes to defined contribution schemes for new employees include HSBC, Barclays, Halifax (now part of HBOS), Abbey National, Alliance & Leicester, Royal & Sun Alliance, BT, Boots, ICI, GlaxoSmithKline and Reuters.
There is also a crisis of confidence in defined contribution schemes, which have been suffering from plummeting stock market returns.
Notes to editors
1 The survey is based on figures given in the annual reports of the firms making up the FTSE 100 index and represents entitlement already built up and based on current salaries.
2 A list of all directors who have built up pension entitlements of ?300,000 or more and further details of the survey are published in the March 2002 issue of Labour Research.
3 Labour Research is published by the Labour Research Department, an independent trade union and labour movement organisation founded 90 years ago. More than 1,800 trade union organisations, including 55 national unions representing 99% of total TUC membership, are affiliated.
4 Labour Research Department press releases are also available on the LRD website at www.lrd.org.uk
5 For further information contact Richard Pond on 0207 902 9812.