Auto-enrolled in workplace pension percentage question

It will be a statutory amount, not one conspiratorially set to make people unsubscribe (except the financially clueless). I very much doubt you can lower it and even if you could I'd strongly recommend you dont.

To put it in context, at just under 6%, the benefits you get will be worth what you'd need to put 2x or even 3x that percentage into a private pension, eg if you worked for Acme Ltd, you might need to put 15% in to get the same. Plus its guaranteed, which a private pension isn't.

FWIW, "the minimum" by which I take it you mean what people enrolled in private employers schemes like Nest and so on pay at present , 1%, is a pathetic amount that will pay a pathetic pension when those people retire. There's no mystery, the more you save the more you get.

https://www.eversheds-sutherland.com/documents/services/employment/auto-enrol-lgps-employers-admission-bodies.pdf

http://www.lgpslibrary.org/assets/gas/uk/AEBv6.1c.pdf

vart400 wrote: »

Thanks for the replies. I didn't realise it was a 'proper' pension. The email said "auto enrolled" so I just assumed it was that.

As johndough says, the LGPS is an 'Auto-Enrolment pension' in the sense it fulfils the legal requirements for Auto-Enrolment (when AE came in, the scheme rules had to be adjusted slightly to fully comply, even though it already operated its own form of 'auto-enrolment'). However, when most people speak of an 'Auto-Enrolment pension', they typically mean one of the newer, 'Defined Contribution' (DC) schemes specially set up for employers who never offered a pension scheme before (or who did, but only enrolled a subset of their staff), and pretty much only wish to do the minimum necessary. In contrast, your LGPS pension is a 'Defined Benefit' (DB) scheme that goes way, way beyond the legal minimum.

On my payslip it has my employers (secondary school) contributions and its 2.5x what I put in.

The employer rate is somewhat arbitrary to the extent it depends on the funding approach of the 'administering authority' (typically a big local council) who runs the pension fund, as advised by the fund actuary, and nature of the employer. E.g., if at some point the function you work in came to be outsourced and you transferred to a private sector employer, under current law that employer would have to join your existing LGPS fund to protect existing members' pension rights. However, they would probably enjoy a higher contribution rate for their pains because they wouldn't have the backing from central government that the school does (in the jargon, their 'employer covenant' would be weaker, making them a greater risk to the pension fund and needing to pay higher contributions to reduce that risk). In a DC scheme, in contrast, there's none of this as the employer's responsibility for the future pension is pretty much extinguished once they have paid the initial contributions.

vart400 wrote: »

However the percentage that I'm paying in seems a far bit higher than the minimum. On my payslip it says "LGPS Office (5.80%)". It came as a bit of a shock as I was expecting something like 3-4%.

Relative to the pension earned, the 5.8% is actually artificially low due to the fact the scheme bands employee rates by annual pay, which given the benefit basis (career average) makes things proportionally cheaper for lower-paid members at the expense of higher-paid ones.

Could it be that my employer is putting it high so that people will cancel?

As others have said, the employer in a multi-employer DB scheme like the LGPS has no say in the matter.