What %age do employers have to pay

Jane1C

My partner has just been offered a position with a company where they say 'in simple terms' they will pay an amount equal to 3% of his annual salary.

We are not sure if they have their own company scheme or if there are recommended schemes or if he can choose to have it paid into a personal one.

What we have been searching for is, what the average employer needs to pay in for an employee, several people have said their company pays either 5 or 6% but weren't sure if this is because the employers are more generous with their benefits.

I would be grateful for your help.

dunstonh

It depends on the size of the company. I would estimate that the average small company pays nothing. Medium companies often pay a nominal amount of 1-3% and the big companies are closer to 5%.

Also, you need to know the scheme because if its a final salary pension for example, the benefits are not dependent on the amount you pay and you can measure these by how little you pay. An 80th scheme where you pay nothing is better than an 80ths scheme where someone pays 7%.

tomstickland

It all depends on how generous the company are. My company expect a 5% employee contribution and they pay in 10%. It's about to change because there's a projected shortfall in the pension fund.

YorkshireBoy

When I left my previous employer just over 3 years ago, I was paying 4% into their final salary scheme which paid out on a 1/60th basis. At the time the company were paying in around 17% of salary.

However, due to a £70m deficit (on £320m liabilities) being announced just after I left they increased the employees contribution to 6.5% and put their own up to 21% (as well as making some other changes that meant I couldn't (economically) take my 21/60ths pension as planned at age 60 ).

That company, at the time I left, was turning over around £700m.


My current employer has a group stakeholder scheme, and they pay 4.5% of salary, but only if I pay 4.5% or above.

However, they are much smaller - with a turnover of £27m

Milarky

There's a rule in relation to employer provided stakeholder schemes. As you probably know since 2001 employers with more than 5 staff must provide 'access' to a designated stakeholder product. Where they already offered something 'better' however, they did not have to do this. But under such circumstances their 'group personal pension' scheme required an employer's contribution of not less than 3% (they are allowed to require the employ to match the contribution however) - with a stakeholder designation the employer isn't required to make any contribution.