Concerns Raised about Unpaid UK Pension Trustees

January 6, 2003 ( - With many UK company pensions not paying their trustees, fears are being raised that the plans are being insufficiently financed, the Financial Times reported.

Officials have urged companies to reconsider their non-payment of trustees, in order to boost the quality of these volunteers and put them on a par with company non-executive directors, according to the Financial Times story.

This call has been made amid mounting concern about the stewardship of UK pension funds, which last year suffered their third negative performance in a row – the worst set of results since the mid-1970s, the Financial Times story reported

But a poll of the top 50 companies in the FTSE 100 by FTfm, the FT’s weekly supplement on fund management, found that more than half do not pay their trustees to run funds with billions of pounds of workers’ money.

Vodafone, HSBC, Shell, Lloyds TSB, Diageo, Unilever, Tesco, National Grid and Anglo American do not pay the trustees or the chairman of the trustees, even though the combined value of their pension fund assets is about £40 billion, the Financial Times said.

Director Pay Comparison

By contrast, the Financial Times said, these companies spend several million pounds on non-executive directors, who are expected to receive a pay rise in the wake of a government-commissioned review by Derek Higgs to be published later this month.

A survey of 950 non-executives, published today by Independent Renumeration Solutions, a UK consultancy, found that the majority of independent directors of quoted companies work for 21 to 26 days a year and receive yearly fees ranging from £21,000 to £50,000.

Company chairman commit 36 to 48 days a year and receive fees typically ranging from £50,000 to £200,000.Lloyds TSB, the UK bank whose pension is one of the 10 largest in the country with about £11 billion of assets, pays its company chairman £355,000 and its non-executives between £38,000 and £59,000, according to IRS.

British Airways pays its trustees between £20,000 and £40,000, while the trustees of the pension fund, with assets of about £10 billion, do not receive any payment.