Firms resist cuts to bosses’ pensions

TWO of Britain’s biggest firms have resisted pressure to cut their bosses’ lucrative pension schemes.

John Fallon of publisher Pearson was handed £206,000 in retirement payments last year, equal to 26pc of his £795,000 base salary.

And Warren East of engine maker Rolls-Royce was given £236,000 towards his pension, or 25pc of his £944,000 salary.

Both firms fall foul of Investment Association guidelines which state bosses should not get payments of more than 24pc.

Fallon is also a member of Pearson’s final salary scheme, meaning he is already entitled to a separate guaranteed income of £105,884 a year for life when he retires.

In total the 56-year-old was paid £3.1m last year, up from £1.8m a year earlier.

Pearson said there would be no change to Fallon’s pension arrangement this year, although it will monitor the situation.

East, 57, was handed total pay of £3.9m last year at Rolls – up from £2.3m a year earlier.

The firm said it will not change its pension policy this year but added that it is considering the implications of the IA guidelines, leaving the door open to future changes. Chief executive pension pay is under the spotlight at present because bosses are often in special schemes not open to ordinary workers. At Rolls, the youngest workers get company contributions equal to 6pc of their salary – although the firm is going to significantly increase this in 2021.

At Pearson, contributions start at 5pc.

Meanwhile, Centrica and British Land are both cutting pension contributions for their bosses to meet the new IA recommendations.

Other firms reviewing their lucrative payouts include energy network National Grid, plumbing business Ferguson and equipment rental group Ashtead.