Private sector pension contribution rates

richyggg

33% gross salary into DC scheme + 10% company , to maybe get £400K pot for maybe 12K, in 15 years, to retire at 60.

50% of net salary into S&S ISA - to supplement the above.

36K salary, no pay rise since 2008.

This is software eng, not much call in the public sector.

jem16

richyggg wrote: »

33% gross salary into DC scheme + 10% company , to maybe get £400K pot for maybe 12K, in 15 years, to retire at 60.

50% of net salary into S&S ISA - to supplement the above.

Thanks. Quite hefty payments but I suppose it's because you are trying to do this over 15 (or is it 17 since your DB pension stopped) years as opposed to 40/45 years.

What age did you start your pension saving? I've been paying since I was 21 and my son since he was 22.

This is software eng, not much call in the public sector.

I would have thought IT specialists would be just as necessary in the public sector.

richyggg

Similar pension saving, from 22/23. Originally in a DB scheme. We were encouraged to switch out to a DC scheme , which I naively did. That is now a 35K pot, for 10 years of contributions. Had I stayed in the DB scheme, it would be worth about 3K a year. That is my point about DB schemes, you have to be in for your whole working life to get 2/3rds of your highest salary.

Next DB scheme for 10 years is the 4K already mentioned. I am not banking on seeing this.

Until a few years ago, I was in ignorant bliss. I supposed I had a 2/3rds final salary scheme .. at least 20K pension ... after all, I had been making pension contributions for over 20 years.

hyubh

richyggg wrote: »

If a DB pension fund is closed, there are no further contributions to it.

So there's no final (or ongoing) lump sum payment on the employer's part...?

The LGPS fund will be topped up/underwritten by taxpayers, so will always pay out. (Unless there is a taxpayers revolt!)

Sort of. Despite its name, the LGPS isn't just a scheme for local authorities, and has a sizeable (and growing) non-public sector involvement. Broadly speaking, this involvement involves two groups of employer - third sector organisations who joined the scheme perhaps decades ago, and private sector ones that joined recently due to outsourcing and employment legislation that protects transferred employees' terms & conditions.

In both cases LGPS membership is usually closed to new members of staff, and the employer contribution rate will cover (perhaps more than cover) liabilities being accrued. In the older admitted body case there will be sizeable historical liabilities still outstanding too though, however this means that when their final LGPS member leaves or retires, the fund actuary performs a 'closing valuation' and the charity or business is handed a fat bill to pay off.

jem16

richyggg wrote: »

Similar pension saving, from 22/23. Originally in a DB scheme. We were encouraged to switch out to a DC scheme , which I naively did. That is now a 35K pot, for 10 years of contributions. Had I stayed in the DB scheme, it would be worth about 3K a year.

That's a shame that you switched this out.

Andy_L

jem16 wrote: »

I would have thought IT specialists would be just as necessary in the public sector.

They are, however the good ones leave for the private sector as the public sector can't/won't pay as much

richyggg

I would think that most IT provision is outsourced, especially the software development. A lot of the software dev is then done in India.

jem16

Andy_L wrote: »

They are, however the good ones leave for the private sector as the public sector can't/won't pay as much

richyggg wrote: »

I would think that most IT provision is outsourced, especially the software development. A lot of the software dev is then done in India.

Agreed.

Time to own up. My son is a Software Engineer and he is good - although I am his mother so I would say that.

However I do know that my own Council does have a major IT department.

hyubh

richyggg wrote: »

I would think that most IT provision is outsourced, especially the software development. A lot of the software dev is then done in India.

From personal experience, major software investments (e.g. SAP rollouts) end up requiring a lot of custom programming, so IT departments are still a reasonable size, if not the most dynamic part of the organisation. Now you might say 'dynamic' and 'public sector' don't go together, but if a larger council's payroll and/or HR department (for example) is not outsourced, then they are probably bidding for other work.

Jack_Griffin

jem16 wrote: »

Agreed.

Time to own up. My son is a Software Engineer and he is good - although I am his mother so I would say that.

However I do know that my own Council does have a major IT department.

That IT department will buy in software and hardware, they won't develop it themselves.. it is not the same as a software engineer who develops software.