“No Dividend Appropriation without Representation”

You don’t have to be raving loony left to get out of your tree at this recent report by the TUC “Pension Watch”.

They have found by examining the published accounts that the average top 100 directors of UK companies will look forward to a pension of £201,700 a year from pension pots that average £3 million each.

This is annual pensions, not salary.

The real issue is not just the size of these payments in itself (although many would disagree) to me the issue is that this is a stonking 25 times the average workplace pension that ordinary workers receive (£8,100 v. £201,700).

Not only that, while many large firms decide that they cannot “afford” to pay what is called “Defined Benefit” (or DB - pensions to its ordinary workers which are much less riskier and much fairer than the new “Defined Contribution” or DC), 76% of director schemes are still on safer “Defined Benefit” (DB)!

The shame gets even worse. Where you have directors on DC schemes, the top directors receive average pension contributions equivalent to 21% of their salaries, while the average for ordinary workers is only 6.5%. This unfairness is difficult (for me anyway) to really get your head around but remember that not only are the directors already paid far more than their average employees but the multiple that their pension contributions are paid is also far, far higher (unlike income tax?)

Finally, while we find that nearly all public and private pensions schemes for ordinary mortals now have a retirement age of 65, the majority of schemes allow directors to retire at 60!

This stinks! I can accept that there will always be in a capitalist society significant differentials in wages and benefits. But the scale of these differentials in pensions is just wrong and surely destructive. Do we really want to live in such a society where there is such blatant unfairness? Surely even those who do not believe in social justice will realise the drip, drip damage that such inequality will result in?

The irony is of course that the ordinary workers who get such a raw deal when compared to their directors are actually the real “owners” of these companies via their pensions and insurance policies. If these owners were able to exercise their rights of ownership would such abuses continue?

So do we need to dress up as native Indians, invade the London Stock exchange and then throw annual reports into Limehouse harbour under the call for “No Dividend Appropriation without Representation”?