The Pension Protection Fund, London, pledged to increase the number of senior managers from Black and other ethnic minority backgrounds to help close gaps in average pay compared to white employees.
The £36 billion ($49.8 billion) pension fund said that an average 23% difference in pay was attributable to fewer Black and ethnic minority in senior roles than white executives. The fund, which pays pension benefits to participants whose U.K. employers have become insolvent, said 16% of its senior staff are from Black or ethnic minority backgrounds.
"Our ethnicity report highlights that there is clearly a problem we need to fix. In a step towards addressing this, we've set targets for ethnicity representation, which ensure we hold ourselves accountable to improving race equality, particularly in senior level roles," Katherine Easter, chief people officer, said in a news release accompanying the report.
In an effort to improve the figures — which showed that mean ethnic minority employee pay was 23% lower than that of white staff, while the mean bonus gap was 18% as of March 31 — the PPF wants to increase the proportion of senior managers from Black and ethnic minority backgrounds to 25% by December 2023. It will also increase the proportion of Black and ethnic minority employees to 30% from 24% over the same period.
The PPF also found there was a gap between the proportion of white employees and Black, Asian and minority ethnic employees that received a bonus. Some 76% of white employees received a bonus compared to 57% of BAME employees in 2020. However, the PPF said that many of its BAME employees were in the six-month probation period for newly hired employees, making them ineligible for a bonus at the time.
The median pay of PPF ethnic minority employees was 23% lower in 2020 than for white staff, while the median bonus pay gap was 11%.
The fund was reporting on the ethnicity pay gap for the first time.
The PPF also published its gender pay gap figures Tuesday, reporting that the mean gender pay gap was 25% in 2020, up from 22.5% in 2019, while the mean bonus pay gap was 65%, down from 66% a year earlier.
The PPF intends to increase the proportion of women in senior management to 45% by 2023, up from 42% in 2020.
"We're disappointed that our gender pay gap has widened slightly this year, but this was something we expected would happen in the short-term as we recruited more women into junior roles so we could build on our female talent pipeline," Ms. Easter added.
The median gender pay gap stood at 15.7% in 2020, up from 13.4% in 2019. The bonus pay gap between men and women remained unchanged at 31%.
The PPF is a signatory of the Race at Work Charter and Women in Finance Charter, which champion equal representation of gender and minority background employees at U.K. institutions.