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'Cash top-ups' for bosses' pensions
MORE than half of top company directors are now receiving cash instead of contributions to their pension schemes, a study has revealed.
The TUC's annual analysis of retirement deals for senior executives found the switch to cash followed changes made by Chancellor George Osborne to tax rules affecting allowances for company pensions.
Research among more than 340 directors found almost two thirds received money last year, totalling £32.7m, for at least part of of their company's contribution towards their retirement.
The number being paid money more than doubled compared with the previous year.
The PensionsWatch report said in most firms, the cash amount received by senior directors instead of a pension contribution was almost £150,000, or 17 per cent of their salary.
Company chief executives are receiving £230,854 on average in cash, almost 25 per cent of their salary, the TUC added.
Frances O'Grady, TUC general secretary, said: "Most workers, if they're fortunate enough still to be in a company pension scheme, will be retiring on a lot less they would have a generation ago.
"Not so for company directors, who will still be looked after very handsomely in their retirement.
"There may have been a move away from more generous defined benefit schemes for top directors in recent years, but this change certainly does not mean they are losing out.
"Unlike employees, who have seen the value of their pensions slashed, company bosses are now getting huge cash payouts on top of their already substantial salaries.
"The success of auto-enrolment in ensuring millions more people have become members of pension schemes with employer contributions needs to be built on to ensure these lead to decent incomes in retirement."