Asked to take a pay-cut and suggested to suspend pension contributions

Spendless

Just asked hubby and employer is stopping paying into pension for next 12 months.

Everyone has been asked to take a pay-cut of varying amounts, dh has been asked for 5%. It can be as high as 20%. I *think* it's been suggested to him as a way of not being worse off in his actual pay packet. Hubby was prepared to go down this route as it'd mean we weren't living on much less, it's me who has reservations.

We can refuse to take the pay cut (employers say they won't force anyone) BUT they will still have to make cuts somewhere....so I think we are better off to do our bit.

No union afaik (privately owned company). But I do think he's going to have to talk the implications over with HR.

ceridwen

Oooooh....."for the next 12 months"....hmmm.....and what "proof" do the employees have that company payments will resume as normal at the end of that 12 months?:cool:

Spendless

ceridwen wrote: »

Oooooh....."for the next 12 months"....hmmm.....and what "proof" do the employees have that company payments will resume as normal at the end of that 12 months?:cool:

None afaik, but what's the alternative.:(

firesidemaid

any possibility of transferring the pension at all? does he have any other pensions?

re. the 5% pay cut. does this take into account that the pension contributions he makes are not taxed.

also re. getting job interviews - make sure that you meet all the person and job spec requirements on your application as a minimum, otherwise you are likely not to get to interview in these difficult times

Spendless

firesidemaid wrote: »

any possibility of transferring the pension at all? does he have any other pensions?

re. the 5% pay cut. does this take into account that the pension contributions he makes are not taxed.

also re. getting job interviews - make sure that you meet all the person and job spec requirements on your application as a minimum, otherwise you are likely not to get to interview in these difficult times

1.His other pension is from a company he worked for from age 17 for 20 years until he left 5 years ago to go his current employer. This previous company is likely to be having an even harder time of it.

2.Sorry don't understand what you are asking, hubby can either take a 5% pay-cut and still contribute to his pension (even though his employers won't be) or he can stop contributing his share to his pension which is 4% and the other 1% (totalling 5%)come out of his wages.

3.Thanks. In the last 9 years (since eldest was born) I have a couple of years in total of work experience, my last relevant work experience was 9years+ ago. The charity I mentioned is sending me an application form to become a volunteer for them.

bristol_pilot

I would say never agree to a pay cut, reason being the chances are if they are in that much difficulty they are going to make you redundant anyway. Look for another job asap and when you get one consider transferring the pension.

Spendless

Everyone has been asked to take a pay-cut not just hubby. He is also in the middle of a project for them and it would look really bad to walk away from this unfinished, it would not go down well with prospective new employers.

vbrindle

bristol_pilot wrote: »

I would say never agree to a pay cut, reason being the chances are if they are in that much difficulty they are going to make you redundant anyway. Look for another job asap and when you get one consider transferring the pension.

Not necessarily, they could be doing this to avoid making people redundant.

I have been warned that I may have to work a 4 day week on 80% pay (ie. paid for 4 days instead of 5). It depends how the market pans out.

I'm worried because I've got debts to pay and hardly any savings to cover any shortfall I have in my wages.

I've decided to freeze my pension contributions and I think I really need to try and save cash just in case. I'm hoping things will improve soon but it's a scary time for everyone.

Anyway, I've seen articles which make it debatable whether you're better saving your cash in an ISA as opposed to pensions and you can always get at it if you need to.

CFC

Spendless wrote: »

Everyone has been asked to take a pay-cut not just hubby. He is also in the middle of a project for them and it would look really bad to walk away from this unfinished, it would not go down well with prospective new employers.

I think that the concern here is not really that leaving the project after a pay cut would look bad to other employers - in the circumstances they would totally understand his reasoning.

The concern here is that if employees do not consent to a paycut, there may be redundancies. Companies do not risk losing their good employees for fun (as they are aware that cutting pay will increase attrition if the employee can find another job).

Your husband would be well advised to start looking elsewhere. I suspect that he may find it hard at the moment to find another job and so it may take some time. I would allow a year to find another job, so I would advise that he accept the pay cut. These are frightening times for job hunters.

Put it this way, I have never known anybody who was made redundant or put at risk, while in 2009 so far I have been put at risk and then 'saved by the bell', and two of my friends have had similar experiences with different employers, all in the space of 10 weeks; and these are not retailers or other industries which are likely to be exposed.