A FTSE SMALL CAP Group Counsel & Company Secretary writes...
Provision 38 of the UKCGC2018 says that pension contribution rates for executive directors “should be aligned with those available to the workforce”.
Is there any published guidance, or does anyone have a view on what “those [contribution rates] available to the workforce” actually means?
For example, my listed plc is the holding company of a group of 7 distinct UK businesses, each of which has its own remuneration and benefits structures, and as regards pension contribution (or payment in lieu) percentages by the employer, can vary across the c.1000 employees from (say) 4% to 15%. The executive directors of the listed company have a contribution rate of 15%. In very broad terms, the contribution percentage increases with “seniority” within the organisation’s management structure. I think the executive directors’ percentages could be said to be “aligned” because they are no greater than the percentages available to the senior management amongst the workforce, with whom one could compare their roles. However, if the comparator percentage is (say) the arithmetic mean of all the 1000 differing contribution percentages, then the executive directors’ contribution percentages are not “aligned”.
Any thoughts or guidance please on how this enigmatic phrase in the UKCGC is to be interpreted in practice?