auto enrolment

bozzy18
bozzy18 Posts: 116 Forumite
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in Pensions, annuities & retirement planning
Hi, I have a stakeholder pension with my employer as part of my salary package that I negotiated before taking the job. they pay 5% of my salary into my pension along with my contributions. This has been in place for 4 years (I am the only employee with this - its a small organisation). Now employer are auto enrolling all employees onto a pension scheme (Peoples Pension) but saying contributions will be 1%! Can they force me to do this as this represents a big drop in their contribution into my pension fund.


Can I say no to this and express a wish to stick with my current pension scheme that they initially set up for me 4 years ago?


Thanks.


Boz
:beer:

Comments

  • dunstonh
    dunstonh Posts: 116,316 Forumite
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    Can they force me to do this as this represents a big drop in their contribution into my pension fund.

    What does your contract of employment say?

    They cant use your stakeholder as that would not be AE compliant. So, changing provider to an AE scheme is understandable. However, the contribution change is the issue for you.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • bozzy18
    bozzy18 Posts: 116 Forumite
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    dunstonh wrote: »
    What does your contract of employment say?

    They cant use your stakeholder as that would not be AE compliant. So, changing provider to an AE scheme is understandable. However, the contribution change is the issue for you.



    contract says:-
    4.2 Pension


    'company' offers you the opportunity to join a Stakeholder Pension Scheme with a maximum employer’s contribution of 5% of salary. The requisite forms will be given to you on request, with your written statement of your main terms and conditions of employment and you should return them within 2 months of starting your employment.
    :beer:
  • dunstonh
    dunstonh Posts: 116,316 Forumite
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    bozzy18 wrote: »
    contract says:-
    4.2 Pension


    'company' offers you the opportunity to join a Stakeholder Pension Scheme with a maximum employer’s contribution of 5% of salary. The requisite forms will be given to you on request, with your written statement of your main terms and conditions of employment and you should return them within 2 months of starting your employment.

    They can change it from a stakeholder to AE scheme as that is due to legislation. That is a non-issue for you too.

    You need to raise the 5% contribution with the employer. Maybe everyone else will get the 1% and you will continue the 5%. Maybe the employer hasnt realised it yet and just needs a prompt.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • bozzy18
    bozzy18 Posts: 116 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    dunstonh wrote: »
    They can change it from a stakeholder to AE scheme as that is due to legislation. That is a non-issue for you too.

    You need to raise the 5% contribution with the employer. Maybe everyone else will get the 1% and you will continue the 5%. Maybe the employer hasnt realised it yet and just needs a prompt.

    Thank you so much - much appreciated. one more question why is stakeholder one not AE compliant? I thought AE only applies to those who does not have an employers pension set up already?
    :beer:
  • dunstonh
    dunstonh Posts: 116,316 Forumite
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    bozzy18 wrote: »
    Thank you so much - much appreciated. one more question why is stakeholder one not AE compliant? I thought AE only applies to those who does not have an employers pension set up already?

    For a pension to be classed as AE compliant, it has to meet certain criteria. A group stakeholder pension scheme can meet the criteria but an individual scheme with an employer contribution cannot.

    For example, the employer has to automatically enrol you into the scheme. It cannot do that with an individual stakeholder.
    Individual stakeholder pensions are not subject to the cap on charges that AE schemes are. Individual schemes have you or your IFA as an administrator. AE schemes have the employer (or their IFA or administrator) as the administrator.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • xylophone
    xylophone Posts: 44,345 Forumite
    Name Dropper First Anniversary First Post
    https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/automatic-enrolment/how-much-do-i-and-my-employer-have-to-pay

    https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/automatic-enrolment/in-a-workplace-pension-scheme-already

    '
    company' offers you the opportunity to join a Stakeholder Pension Scheme with a maximum employer’s contribution of 5% of salary.

    But no minimum is stated......
  • bozzy18
    bozzy18 Posts: 116 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    dunstonh wrote: »
    They can change it from a stakeholder to AE scheme as that is due to legislation. That is a non-issue for you too.

    You need to raise the 5% contribution with the employer. Maybe everyone else will get the 1% and you will continue the 5%. Maybe the employer hasnt realised it yet and just needs a prompt.



    Thank you for this suggestion - my boss has now finally responded to my query saying stuff like finance is tight and I have to accept the change. I will effectively lose the 5% contributions and switch to 1% of my annual salary from 1st August. she more or less said like it or lump it - tough! Nothing I can do about it apparently. They are paying £100 a month into my pension fund and under the new scheme it will be about £240 a year! A significant drop - are they legally allowed to do this?! :(:mad:
    :beer:
  • xylophone
    xylophone Posts: 44,345 Forumite
    Name Dropper First Anniversary First Post
    ! A significant drop - are they legally allowed to do this?!

    You might discuss with TPAS but it seems to me that the answer is that they can - looking at the wording of your contract, it would seem that they could have lowered their contribution to that too?

    The contribution payable by the employer under AE will increase, as will yours.

    What is going to happen to your stakeholder?
  • bozzy18
    bozzy18 Posts: 116 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    TPAS?


    As for my stakeholder - I guess it will either be frozen or I continue with my own contributions.
    :beer:
  • xylophone
    xylophone Posts: 44,345 Forumite
    Name Dropper First Anniversary First Post
    TPAS

    https://www.pensionsadvisoryservice.org.uk/
    As for my stakeholder - I guess it will either be frozen or I continue with my own contributions.

    Better not to guess but to check the facts.

    At all events, it won't be "frozen" - the value will vary with investment performance.

    There is some information here about transfer to People's Pension.

    https://thepeoplespension.co.uk/employees/joining-the-peoples-pension/transfer-other-pensions/
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