Unions call for greater pension disclosure
UK – The main union body in the UK has called for firms to disclose the details of employee and director pension schemes in their annual reports.
The Trades Union Congress said there is “a two-tier system with final salary arrangements for directors and inferior pensions for workers”.
The TUC’s latest PensionWatch report revealed that 55% of managers in defined benefit schemes accrue up to twice as much as other workers.
The report is based on publicly available information released by 92 FTSE 100 companies. Seventeen of the companies said that at least one director had an accrual rate of 1/30th, compared with the National Association of Pension Funds’ average estimate of 1/60th.
Forty of the 92 firms, which were not named in the report, provided no information on contribution levels or accrual rates. In six cases it was not possible to identify the kind of scheme provided.
The TUC said there is a “two-tier pension system”, with most directors in larger companies still on defined benefit or final salary pension provision ”even though they had ended such schemes for ordinary workers”.
“It smacks of double standards for British boardrooms,” said TUC general secretary Brendan Barber in a statement.
Calling for more clarity, the report also said that the “lack of transparency may allow directors to ramp up retirements benefits”.
“It is simply hypocritical for directors to protect, or even enhance, their own pensions when many companies are closing final salary for new employees” the report says.
The TUC report comes as the Transport and General Workers Union says that its members at engine maker Lister Petter could lose up to 90% of their company pension. It said the firm has gone into administration and that the new buyers have refused to underwrite the scheme.