Pension contributions.

value_seeker

I belong to my company pension scheme and have received a letter saying they will be changing my (and other employees) level of contributions as the company will have to offer pensions to all employees under the new government legislation.
My company currently contributes 7% of my basic salary (as I have over 5 yrs service) into my pension. Because they are now required to fund so many more employees they have stated that this contrbution will decrease to 3% as the benefit will have to be offerred to a larger number of my colleagues.
(I do pay extra into my pension on top of the company contributions)
The letter is a letter of consultation 60 days (until end August)
which allows for comment and feedback.
I am not happy about this large decrease as I believe that once a company has committed to employees within the current scheme it cannot retract what is being paid in. What the company offers new entrants I regard as a seperate offer and agreement.

Please can anyone tell me if I have a case to complain to my HR dept for these enforced changes?
Any advice on this welcomed.

dunstonh

I am not happy about this large decrease as I believe that once a company has committed to employees within the current scheme it cannot retract what is being paid in.

The alternative is to make you and/or others redundant or find other ways to cover the cost.

Please can anyone tell me if I have a case to complain to my HR dept for these enforced changes?

That is what the consultation period is for. For you to make your objections heard. Maybe suggest alternatives and how they could be funded (to make your objection more effective than those that will just be ranting that it is so unfair).

Typically, after the consultation, they will do what they planned and you will take it or leave it. Not ideal but this was predicted when auto enrollment was proposed.

value_seeker

Many thanks for your quick reply and advice dunstonh. I guess in the back of my mind I suspected it would all go through anyway!
As my company letter says, if you opt to do nothing the company will assume you have accepted the changes.

However, from reading the financial press over the last few months, and being aware that the government were making these changes, most FA's said they thought current employee schemes would remain the same, with new agreements set up for employees following the legislation!
Oh well....looks like I will have to 'up' my level of contributions!
(which ....responsibly....is what the government intended anyway!)
Kind Regards.

N1AK

Taking it from 7% to 3% seems like a big change. Assuming the people on pensions already are higher earners (normally the case) then it would likely take a 200% increase in scheme members to justify that change.

I would suggest getting organised as a group (you and anyone else interested in the change) and asking some questions:
1/ What are the estimates for number of people who will join the new opened up scheme?
2/ What will the companies pension bill change by if the estimate is accurate?
3/ What will the company do if the estimated take up is higher than actual take up?
4/ Are all employees at all levels affected by this change (including the senior management and executives)?
5/ Why have they chosen not to set up a new separate scheme for those not already allowed to join the current one with a lower employer contribution?

Make clear that you need to know this information in order to make an informed judgement and that delays in providing it may make it harder for you to accept the consultation timeline they suggest.

zagfles

Basically it's a change to your T&Cs, it not altering any past benefits (ie what's been paid in till now you keep, AIUI).

Companies can do this provided they jump through certain hoops like a consulation period and giving you your contractual notice. Really need to involve your union (or join one?).

Southend1

zagfles wrote: »

Basically it's a change to your T&Cs, it not altering any past benefits (ie what's been paid in till now you keep, AIUI).

Companies can do this provided they jump through certain hoops like a consulation period and giving you your contractual notice. Really need to involve your union (or join one?).

This.

Join your union now and ensure they are aware of the situation.

Thrugelmir

In effect it's a pay cut. You've a better idea than us as to the viability of your employer. In the current economic climate many difficult decisions are having to be made.

value_seeker

Thank you all so much for your replies and views.
I will be discussing the situation with similarly affected colleagues, in the absence of a Union, and taking it forward from there.