No Final Salary Pension in new job

EconomicsGirl

The exact amount a final salary scheme is worth will vary from year to year - it depends on the performance of world stock exchanges and bond markets (and also depends on the level of employee contributions). As these haven't been performing well employers contributions have rocketed in recent years but obviously if their performance improves (unlikely at the moment in the short-term) the employers contribution would go down.

I've just had my old employers (public sector agency) pension statement - the employers contribution last year was 29% and the prior year was 32%, originally it was more like 12%. My husband works for a private company with a final salary scheme though foolishly he opted out - their employer puts in 23% with employees paying 10%. So in the current climate I'ld say c. 20-30% for the short-term assuming a contribution rate from an employee of around 6%. If you are in a public sector scheme obviously changes will be going through to career average, a small increase in contributions and RPI to CPI. I would say 20% in the long-run.

You would be lucky to get another employer with a final salary scheme though its not impossible. I have moved to a private sector employer which makes 20% contributions and I took that as the same value as my public sector one over the longer-term.

Intoodeep

FATBALLZ wrote: »

Final Salary schemes were never meant to be as valuable (ie expensive for the employer) as they have turned out. You are very lucky if you are in one at the moment. Your employer will pay you the market rate for the job and your skills, they aren't going to tack on an extra 20% just because you've abandoned a good pension scheme. Makes far more sense to them to employ somebody else if you start demanding a big chunk extra than you are worth to them.

I lost £10k of tax free share options profit in moving jobs this month, but I haven't asked for compo from my new employer for it, they just pay me what I'm worth, that's how it works.

Exactly, the OP leaves a job with a FSS and just because they are starting a new job that doesn't, they think they should get some form of compensation :beer::beer::beer:
Best one i've heard today.:rotfl::rotfl:

Uncertain

Intoodeep wrote: »

Exactly, the OP leaves a job with a FSS and just because they are starting a new job that doesn't, they think they should get some form of compensation :beer::beer::beer:
Best one i've heard today.:rotfl::rotfl:

What on earth are you on about?

The OP, as I read it, is looking at alternative jobs and is very sensibly trying to put a financial value on the different pension scheme.

How negotiable the potential new employer may be is another matter but there is no substitute for doing your homework.

I actually find it quite refreshing to find somebody thinking about their future!

heretolearn_2

'If I get offered the job, what do people think is a fair value to negotiate to make up for the loss of a final salary scheme?'

I took this as the OP wanting the new employer to pay extra to compensate them for the loss of their fss. Maybe it was just phrased oddly - but as it is it is clear they want to negotiate for this reason. And lots of us have said this isn't reasonable.

Acc72

Uncertain wrote: »

What on earth are you on about?

The OP, as I read it, is looking at alternative jobs and is very sensibly trying to put a financial value on the different pension scheme.

How negotiable the potential new employer may be is another matter but there is no substitute for doing your homework.

I actually find it quite refreshing to find somebody thinking about their future!

I agree.

I don't know why people feel it necessary to beat up the OP just because they have a job that pays a final salary pension.

What they are doing is correct - eg. if I earned £20k plus a company car then I could work out that if I moved to a job that did not have a company car then I would need to be paid £25k to break even - this would not be asking a new employer for "compensation".

McKneff

I would think nine times out of ten when the new company offers an amount there is a little room for negotiating but if I was an employer interviewing 20 people and one of them wanted 20% more than I was offereing they would be looked on less favourably than an interviewee who had the same experience but would be quite happy with the salary offered.

Just my slant on things.

rrf494g

value of final pension scheme

It's impossible to say with any certainty what the future value of your current pension scheme is worth. If it is "40th's" (I was once in such a "gold-plated" scheme) this was worth nearly 100% of my salary, as the terms and benefits were so generous (early retirement etc) BUT that scheme was designed when the cost to the employer was much lower. The scheme now has been withdrawn. So could yours. It could be replaced by a money purchase scheme. You can calculate what value your scheme has been BUT its a guess as to how long that will be available. Of course, negotiate to obtain the best possible choice of job/salary in the future, but if I were employing anyone I would not think the argument that their current scheme would go on for ever, would impress me. I think ALL pension schemes (even in the public sector) will "come down" to basic money purchase eventually. There just isn't the money to do otherwise.

good luck

Acc72

McKneff wrote: »

I would think nine times out of ten when the new company offers an amount there is a little room for negotiating but if I was an employer interviewing 20 people and one of them wanted 20% more than I was offereing they would be looked on less favourably than an interviewee who had the same experience but would be quite happy with the salary offered.

Just my slant on things.

When did the OP say they were going to do that ?

The OP will not be applying for jobs and then be asking for a 20% premium !

They just want to work out their break even point - so, if they currently earn £20k plus pension and this equates to (say) £25k without pension in another company, then they are faced with a decision - to either apply for the job at the rate offered or not (not to try to convince the potential new employer to pay them £25k !).

Why are people jumping to conclusions ?

McKneff

Acc72 wrote: »

When did the OP say they were going to do that ?

The OP will not be applying for jobs and then be asking for a 20% premium !

They just want to work out their break even point - so, if they currently earn £20k plus pension and this equates to (say) £25k without pension in another company, then they are faced with a decision - to either apply for the job at the rate offered or not (not to try to convince the potential new employer to pay them £25k !).

Why are people jumping to conclusions ?

I am currently looking for a new job and I understand that the new role I am interested in doesn't offer a final salary pension whereas my current role does.

I didnt jump to conclusions, the OP mentions a particular job he is interested in, in that case he must know roundabout what the salary is, he has obviously researched it other wise he wouldnt know that they dont offer a fs scheme. Why are people so quick to judge?

Acc72

McKneff wrote: »

I didnt jump to conclusions

Didn't you say the following :


"if I was an employer interviewing 20 people and one of them wanted 20% more than I was offereing they would be looked on less favourably than an interviewee who had the same experience but would be quite happy with the salary offered".


At what point has the OP said that they wanted 20% more than the new job was offering ?