'Fat-cat pensions' under attack

CBI says final salary pensions can be a good recruitment tool for top executives

The TUC is accusing bosses at UK companies of enjoying pensions worth up to 50 times more than their staff.

The union body said many employers were still benefiting from generous final salary schemes, even though the schemes may be closed for their staff.

The average director's pension is now worth £169,000 a year, more than 26 times the national average.

Employers are likely to give 20% of a director's salary in contributions, compared to 6.5% for staff, it said.

The survey looked at staff and director pensions at 127 major UK companies, both FTSE 100 employers and the largest employers by size.

'Fat cats'

Brendan Barber, TUC general secretary, said: "Employees in every sector have seen their pensions under attack in recent years, but few of those making the decisions show any willingness to sacrifice their own pensions.

"Fat cats are still supping the pensions cream and have taken little or no notice of business leaders or ministers who say they should set an example."

The report found the average director's pension was worth £2.15m, rising to £4.5m for the largest pensions.

Employers do need the freedom to arrange attractive packages to entice top executive talent CBI spokesman

The TUC said that more than 80% of the directors in the study had final salary pensions, which are linked to salary and relatively risk free.

However, only 40% of companies had the schemes open to staff.

Recruitment tool

The TUC highlighted a speech last year by Digby Jones, director general of the Confederation of British Industry (CBI), in which he said that "business must be mindful of the need to set a good example when it comes to, for example, salaries and pensions".

A spokesman for the CBI defended the pension record of directors and said that offering final salary schemes was a good recruitment tool for top executives.

"Generally speaking, in most instances, where a final salary scheme has been closed to shop floor workers it has also been closed to members of the board," a spokesman told BBC News Online.

"There may be examples where that has not happened, but employers do need the freedom to arrange attractive packages to entice top executive talent."