The research found that 21 per cent of senior executives had a retirement age of 60, compared to just 9 per cent for other staff, but only 30 per cent of executives have a normal retirement age below 65. The survey targeted over 3,000 senior HR managers and directors from a wide range of organisations throughout the UK.
Rate of accrual still remains beneficial for senior executives, with 37 per cent accruing on a 45ths basis, compared to just 3 per cent of other employees, but over 50 per cent of executives have an entitlement of no more than one sixtieth per year of service.
A majority of defined contribution schemes offer variable employer contributions based on scales which may be age-related or linked to a level chosen by the member. Executives are receiving higher contributions, but not markedly so, with 37 per cent of executives receiving 10 per cent or less, compared to a figure of 53 per cent for other staff. 12 per cent of top staff receive contributions of 20 per cent of salary or more, compared to just 4 per cent of other employees.
The survey found that 23 per cent of senior executives are offered cash alternatives to pension contributions if they are up to the lifetime limit. No employers in the survey reimburse executives for any additional tax liability suffered by them if they exceed the lifetime tax allowance.
Robert Birmingham, managing director of Xafinity Consulting says” Unexpectedly our results show that the majority of senior executives are not now singled out for special treatment. It seems to us that this more egalitarian approach to the provision of retirement benefits is a relatively recent phenomenon.
“It may be a consequence of the increasing costs of providing defined benefits, greater realisation of the cost of these benefits and changes in legislation such as the 2006 pensions tax regime. Whatever the reason, our survey reveals a convergence of benefits as between senior executives and other employees.”