Pensions bonanza for Bank bosses
THE Bank of England has earmarked more than £500,000 extra to provide generous free pensions to grandees, including Deputy Governors David Clementi and Mervyn King. Both will benefit from the Bank's handsome Court Pension Scheme, which is non-contributory and provides a pension of two-thirds of final salary after only 20 years' service.
Under most schemes, including the Bank's pension for humbler employees, employees must work at least 40 years before clocking up the maximum pension.
The chiefs' nest-eggs, paid out of the public purse, are accruing at a time when thousands of ordinary workers are being shunted out of secure final-salary schemes and into riskier stock market linked plans.
A spokesman said the Bank had set aside the extra £543,922 'for actuarial reasons' as longer life expectancy and lower stock market returns are making it more expensive to provide the promised benefits.
Governor Sir Edward George, 64, has a pension entitlement of £167,000 a year, but is not yet drawing it because he decided to carry on working past the Bank's normal retirement age of 60. Clementi, 53, has notched up an entitlement of £31,700 a year after just four years' service. King, also 53, is in line for £77,500 a year after 11 years at the Old Lady, according to the annual report.
Salaries paid to the Governor and his deputies rise by 2.5% a year. Sir Edward was paid £249,909. Clementi received £208,051 and King was paid £207,400.
The report also disclosed that in 2001-2002 the Bank spent £6.2m on legal fees relating to the collapsed Bank of Credit and Commerce International. The Bank has been issued with writs demanding up to £748m by depositors claiming BCCI was not adequately regulated.
