Introduction to different pensions?

timborules

Hi Everyone,

I have a new job and am employed by a US company with a satellite operation here in the UK. The satellite UK operation legally employs me here in the UK. There is very little expertise on HR issues (including pensions) here in the UK where we have less than 10 staff. Most other staff are based in the US.

As a US company, compared to US employment T&Cs, EVERYTHING they offer us (i.e. more than 12 days annual leave, any pension contribution etc...) they think is very generous (as they do not contribute anything to US staff 401(k)).

I am trying to give them an overview of 'standard' pension offerings here in the private UK sector so that they have an appreciation of what's the industry norm here. In my previous role (at a competitor of theirs), the pension was salary sacrifice, employer contributions matched up to 10% which within my industry sector, is pretty standard. (Before anyone says I should have looked at this before joining, pension was 'TBC' at the point of signing ).

Does anyone know of a simple overview of industry standards in this respect?

Thanks in advance everyone and seasons greetings!

Lokolo

This may be of use

http://www.ons.gov.uk/ons/rel/fi/occupational-pension-schemes-survey/2013/index.html

For private sector defined contribution schemes, the average contribution rate was 2.9% for members (employees) and 6.1% for employers.

Although it's very basic and I can't seem to find out whether or not its non-matched contributions or matched.

The figures are unfortunately depressingly low (esp employee contribution).

I work in the city and so contributions are very generous. They provide 16% basic, and match a further 2% and it is done via salary sacrifice. Although this is very rare, other firms in the same industry only match 5% or so.

worried_jim

My scheme is salary sacrifice (high street bank). We can pay 3% to 5% and the company will add in 9% @ 3% employee contribution, 11% @ 4% and a maximum of 13% if the employee pays 5%- which is what I do.

We can pay more than 5% but the companies contribution on top of this will remain at a maximum of 13%.

timborules

Thanks both - the ONS stuff is helpful, as their proposed scheme is if we contribute 5%, they'll contribute 4% - but that's capped. So if I contribute 10%, they'll still contribute 4%. Not seeking anything as generous as the previous post (but would be nice!), but something that matches contributions would be nice.

xylophone

https://www.gov.uk/workplace-pensions

The satellite UK operation legally employs me here in the UK. There is very little expertise on HR issues (including pensions)

http://www.hl.co.uk/company-pensions

https://www.hl.co.uk/company-pensions/free-employer-resources/free-guides/employee-benefits-communication

Perhaps the MD would like to book a place at the Free Workplace Pensions Revolution Breakfast Seminar at the Ritz.....:)

Seriously, it might be a start?

mgdavid

I'd say IT industry yardstick is roughly what you used to be on, i.e. minimum 5% + 5% with level matching up to 10%, all salary sacrifice.

kangoora

Telecomms industry here, sliding scale of matching roughly 2% more by employer capping out at 7% employee/9% employer - with salary sacrifice also.

A word of caution, especially if dealing with a USA employer. If you get salary sacrifice then make sure any T&Cs on redundancy etc. are based on your 'notional' salary and not your 'salary sacrificed' salary.

If in the future you go deeply into salary sacrifice and your actual sacrificed salary is used to base any redundancy on then you will look like being a very cheap person to lay off if they decide to down-size