Employer pension contributions 'holiday'

Blue_Parrot

How complicated would it be, for the Employer to stop paying into the company pension scheme, for a few months?

The annual form has just arrived, with the usual list of 'expected payments' from the company. The company is considering stopping pension contributions for 3-4 months to save costs.

There is only one person in this pension scheme, who is in agreement with this concept. The fund is healthy.

Thanks in advance. (for responses from Employer point of view)

McKneff

If its in an employees contract that the employer pays into a pension pot for that employee you cant just decide willy nilly that you are going to stop for a while. Unless that same clause is actually in the contract.


I think you will have to look elsewhere to cut costs....

kidmugsy

There were pension contribution holidays in the 80s when Nigel Lawson decided that employer contributions to a well-funded scheme amounted to tax-dodging, and the Inland Revenue issued instructions accordingly. One of Lawson's dafter decisions, I'd guess.

Still, contracts of employment don't (do they?) specify employer contributions, they specify the benefits to be paid eventually to the member. That's why they are Defined Benefit schemes.

hyubh

Blue_Parrot wrote: »

How complicated would it be, for the Employer to stop paying into the company pension scheme, for a few months?

You should clarify whether this is a DB or a DC arrangement. If the former you're only making it harder for yourself down the line (unless it's multi-employer DB, in which case the contributions are a contractual or legal obligation with the pension fund/scheme), so presumably it's DC?

Blue_Parrot

hyubh wrote: »

You should clarify whether this is a DB or a DC arrangement. If the former you're only making it harder for yourself down the line (unless it's multi-employer DB, in which case the contributions are a contractual or legal obligation with the pension fund/scheme), so presumably it's DC?

Defined contribution, not defined benefit, and no contract of employment.