Rules for the Rich? Contemporary Trends in Executive Pensions

Abstract

Both the UK and the USA have long-established employer-based welfare systems providing a range of benefits, of which one of the most significant has been the occupational pension. Over recent years, these pensions have come under pressure, which has manifested itself in a change in the form of provision from defined benefit (DB) to defined contribution (DC) schemes. However this shift has not been universally applied, as there has been differential treatment within the private sector between senior executives and the rest of the workforce. The aim of this paper is to explore this differential treatment using illustrative material principally from the UK but supplemented with additional material on the USA. The paper is divided into three parts: the first outlines the recent changes to private sector occupational pension provision; the second discusses the pension provision for senior executives (namely, board members); and the final section discusses the broad trends outlined in the first two sections. It also explores explanations of these trends and their implications for changing conceptions of the role of the corporation as a provider of ‘occupational welfare’.