04 September 2006
A survey by Labour Research magazine has uncovered details of
the "super-enhanced" pension arrangements of top executives in the
FTSE 100.
According to the survey, a total of 112 FTSE 100 company
directors are currently entitled to a pension worth at least
£200,000 a year. Twenty-seven of them can expect a pension of
at least £500,000 a year - the equivalent of £9,615 a
week, 71 times the basic state pension for a married couple.
Top of the table of high pension earners is Lord Browne, chief
executive of oil multinational BP, who would be on £991,000
or £19,058 a week if he retired tomorrow. He is also eligible
for a lump sum equal to a year's basic salary - if he stands down
in late 2008 as expected, this will be worth around £1.5
million.
The survey found that FTSE 100 directors can typically retire at
60 on a full pension. Those at pharmaceutical giant AstraZeneca can
retire as early as 50 if it is at the company's request, while
directors of financial services provider Friends Provident and
energy group BG can retire at 55 with no reduction in their
pension.
Over three-quarters (77) of the companies that make up the FTSE
100 index still have final salary schemes for their directors.
These findings come at a time when many companies have been closing
their final salary schemes to new employees. The remainder of the
directors in the FTSE 100 have defined contribution schemes. These
pensions are open to fluctuations in the stock market but Labour
Research says it is unlikely that they will face a difficult
retirement - mining group Xstrata more than tripled its
contributions to chief executive Mick Davis's defined contribution
plan last year, putting in £1.08 million.
Neal Moister, researcher for the Labour Research Department, who
carried out the survey, said: "It is very hypocritical for so many
senior business figures to advocate pushing the state pension age
up and up while they negotiate a completely different set of rules
for themselves. Many low-paid workers will have to work for many
more years to receive a basic pension while FTSE 100 directors can
look forward to a luxury retirement from the age of 60 if not
younger."
