Value of executive pension provision rises to £242,000

The average value of a FTSE 100 executive’s pension provision has risen to £242,000 over the past two years, according to research by consultancy Lane Clark and Peacock (LCP).

The 2013 LCP FTSE 100 Executive pensions survey, which questioned 340 executive employees in FTSE 100 organisations, showed a 7.5% rise in the average value of a FTSE 100 executive’s pension provision since 2011, up from £225,000 to £242,000.

The research also found:

  • The median compensation for cash in lieu of pensions has risen from 25% to 30% of basic salary.
  • 30% of respondents have defined benefit (DB) pension schemes as part of their remuneration package, down from 43% in 2011, and from 52% in 2009.
  • On average, the cost of a DB pension scheme has increased from 60% of annual basic salary in 2011 to 66% in 2013.

Mark Jackson (pictured), partner at LCP and author of the report, said: “There are striking pension challenges to come for UK employers and their executives.

“There is plenty for organisations to do in reviewing their pension compensation packages and for executives in monitoring their savings, both present and future, against their new allowances.”