Pensions row over 'millionaire mandarins'

A THIRD of Britain's senior civil servants are sitting on pension pots worth more than £1million, it emerged yesterday.

They include four mandarins at the Scottish Government in Edinburgh, who have amassed an average sum of 1.35m, equivalent to an annual payment well in excess of 50,000 a year.

In total, the figures show that the 188 top Whitehall chiefs across the country have built up a staggering 133m of pension entitlements, or 708,904 each.

The widening gap between the country's top officials and private-sector workers is further highlighted by separate figures which show that, last year, they retired on average aged just 58.

The Liberal Democrats, who uncovered the figures, last night demanded immediate reform, saying it was no longer tenable – when pension pots were being cut and the retirement age increased – for public servants to be rewarded so extravagantly.

In contrast to the vast sums for the senior civil servants, the average pot across the UK is worth 26,000, according to the National Association of Pension Funds, resulting in a pension of around 1,300 a year.

The biggest pension winner is Sir Jock Stirrup, the Chief of the Defence Staff, whose fund is now worth 2.55 million.

He is closely followed by Sir Liam Donaldson, the chief medical officer for England, whose pension entitlement stands at 2.32m.

In Scotland, permanent secretary Sir John Elvidge has amassed a sum of 1.7m, which will pay him between 75,000 and 80,000 when he reaches 60.

On top of that, Scottish Government's accounts show Sir John will also be rewarded with a tax-free lump-sum of between 225,000 and 230,000.

Robert Gordon, the head of Scottish Government's justice department, is sitting on a pot of 1.56m, and will walk off with a lump sum of 205,000 when he retires.

Last night, Lib Dem pension spokesman Lord Oakeshott said: "These millionaire mandarins' pension pots should be consigned to the history books at a time when final-salary pension schemes are almost extinct for private-sector employees.

"Mandarins with their millionaire pension pots are like the landowners of yesteryear, driving around in their gas-guzzling Rolls-Royces – a magnificent spectacle but unfair and unaffordable for ordinary people who are forced to cough up.

"Retirement at 58 is cloud cuckoo land for most private-sector workers, many of whom find their pension savings shot to pieces. It's time to put the lid on these monster pension pots and set up an independent commission to make public-sector pensions fair and affordable for the whole country."

Scottish Lib Dem leader Tavish Scott added: "With the pressure on public finances, all areas of expenditure have to be reviewed, including top mandarin pensions. Alex Salmond must look at Scotland, too."

Of the 188 top Whitehall chiefs whose pensions were examined by the Liberals, 58 had funds worth more than 1m. The best-rewarded department chiefs were at the Ministry of Defence where the 12 bosses averaged 1.4m.

Sir Gus O'Donnell, the Cabinet Secretary, has a pension pot worth 2.09m.

The huge sums are the product of the gold-plated senior civil service pension plan, which allows the country's top mandarins to enjoy unlimited index-linked pensions. They receive tax-free lump-sum payments on top of this.

Britain's civil service pension scheme is one of the most generous in the world, and most workers are required to pay in just 1.5 per cent of their pensionable earnings.

The basic state pension, which his department administers, is currently 95.25 a week – less than 5,000 a year.

The Treasury insisted that public-sector pensions remained "fully affordable and sustainable into the long term".

Six figures

DR KEVIN WOODS

the chief executive of NHS Scotland

Salary 160,000-165,000

Annual pension at 60 55,000-60,000

No lump sum

Total pension pot 1,042,000

RICHARD WAKEFORD

former director-general Environment, Scottish Government.

Salary 150,000-155,000

Annual pension at 60 50,000-55,000

Lump Sum 160,000-165,000

Total pension pot 1,122,000

PHILIP RYCROFT

Director General, Innovation and Enterprise, at UK government.

Salary 125,000-135,000

Annual pension at 60 25,000-30,000

Lump sum 85,000-90,000

Total pension pot 466,000

ANDREW GOUDIE

Alex Salmond's chief economic adviser.

Salary 135,000-140,000

Annual pension at 60 35,000-40,000

Lump Sum 105,000-110,000

Total pension pot 734,000

ROBERT GORDON

the senior civil servant at the justice department.

Salary 155,000-160,000

Annual pension at 60 65,000-70,000

Lump sum 205,000-210,000

Total pension pot 1,560,000

SIR JOHN WILLIAM ELVIDGE, KCB

Permanent Secretary to Scottish Executive, appointed in 2003.

Salary 180,000-185,000

Annual pension at 60 75,000-80,000

Lump sum 225,000-230,000

Total pension pot 1,707,000