Commenting on the TUC PensionsWatch survey published today (Thursday), the UK’s leading voice of workplace pensions called for greater clarity around boardroom pensions.
Joanne Segars, Chief Executive of the National Association of Pension Funds, said:
“While it is logical that higher earners will accrue bigger retirement pots, we have some real concerns about this issue. Investors may have questions about fairness if boardroom pensions are much more generous than those on the shop floor.
“Special arrangements like lower retirement ages and higher contribution rates need to be explained. We need much more transparency in this area. Everybody deserves a good workplace pension.
“It is also worrying that directors’ pensions are not usually linked to performance. This could mean bosses are rewarded in their retirement despite failure in the job. Pensions must not become a back-door to boosting pay.
“Investors such as pension funds need more information about these schemes if they are to hold management to account. We hope that companies will be more upfront about boardroom retirement deals.”
In June this year the NAPF and the Local Authority Pension Fund Forum (LAPFF), whose members hold £800bn and £85bn of assets respectively, wrote to the chairman of every company in the FTSE 350.
The letter noted that firms already offer some information about boardroom pensions, but it called on them to volunteer more, so that shareholders can judge total pay policies more effectively. The letter did not call for directors’ pensions to be cut, but argued that more clarity is needed.
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