Change in pension contributions due to car allowance becoming part of basic pay

dtaber42

This month my net salary has decreased in comparison to previous months, so has my car allownace. I now no longer see my car allowance as an allowance on my payslip, as it is now being included in my basic pay, which now means that it's pensionable and so is deducted from this. Due to this change my employer has also reduced the allowance payment to £179.33 per month instead of the £212.50 per month as the employer also has the extra costs of pension contributions. So in my case I now move into ahigher pension ban,d paying 6.8% instead of 6.5% leading to a decrease in my net salary. Can my employer do this without consulting with me first?

Marcon

What does your contract say?

Thrugelmir

Why wouldn't you want the benefit of the extra pension provision? 

Marcon

Thrugelmir said:

Why wouldn't you want the benefit of the extra pension provision? 

Because OP's take home pay has been reduced, and it sounds as if the extra employer pension contribution is in fact being 'paid' by reducing the car allowance.

hyubh

dtaber42 said:

This month my net salary has decreased in comparison to previous months, so has my car allowance. I now no longer see my car allowance as an allowance on my payslip, as it is now being included in my basic pay, which now means that it's pensionable and so is deducted from this. Due to this change my employer has also reduced the allowance payment to £179.33 per month instead of the £212.50 per month as the employer also has the extra costs of pension contributions. So in my case I now move into a higher pension band paying 6.8% instead of 6.5% leading to a decrease in my net salary. Can my employer do this without consulting with me first?

Leaving aside the fact that, come retirement, this may actually prove a net gain, what's the pension scheme? If it's LGPS (for example), then a car allowance is not, in fact, pensionable according to the scheme regulations, and payroll have made an error thinking it is.