FTSE failing on pension gap

FEWER than one in seven FTSE 100 companies have taken immediate action to close the pension gap between executives and shop floor staff.

Thirteen of the UK’s largest companies have succumbed to pressure from shareholders and MPs to cut the pension contributions of top directors.

There has been widespread outrage that bosses receive annual pension payments worth as much as 45pc of their base salary, while workers typically receive between 5pc and 15pc.

Four companies, including Persimmon and Centrica, have cut pension payouts for directors. At housebuilder Persimmon they will be brought in line with the workforce in 2020, while British Gas owner Centrica is to cap contributions at 15pc.

A further six, including HSBC and RSA Insurance, have cut pension payments for current directors as well as future hires, says The Investment Association. BT, Aviva and RBS have appointed new directors with pension contributions in line with their workforces.

But around 70 firms have not budged. Last year 48 chief executives were handed pension cash worth more than 25pc of their salary. A further 25 received more than 15pc of their salary.

Frank Field MP, chairman of the work and pensions committee said: ‘Thirty companies making changes after this year’s AGMs is a welcome, if inevitable, first step, but the spotlight of scrutiny is not going to go away.’

Chris Cummings, of the Investment Association, said: ‘Shareholders want pension payments to come down to the same level as the rest of the workforce.’