Proposed Company pension contribution changes

dicky_dunock

My company say if i want to stay in the DB scheme i have to start paying 10.5%-11.5% of my pensionable salary and that will increase further as i get older up to probably 14.5% or even higher.I currently pay 8.5%.If i can afford the large increase would you stay in the DB scheme.Or change to the DC scheme being offered with much lower contributions?

jamesd

Stay in the DB scheme. The proposed costs don't seem unreasonable for the sort of benefits that DB schemes tend to provide. It's not really possible to consider this specific scheme because we know nothing about how it pays and what the benefits are. Things like final or average salary, 1/60th, 1/80th, normal retirement age, spousal benefit and such all affect the value.

DB schemes are on the way out because they are in general too good a deal for the employees. Best generally to stay in one when you have one available to you.

atush

I would stay in, but if I wanted to retire before scheme age, i'd save into a DC PP alongside

dunstonh

Or change to the DC scheme being offered with much lower contributions?

If may cost you less but will result in less. So, you would have to pay more into it and that amount is almost certainly much more than the 11.5% you are being asked to pay.

sandsy

What contribution does the employer pay to the DB scheme and the proposed DC scheme?