Whats considered a "good" employer pension? Me 5% employer 3%?

Anonymous101

Marcon said:

Anonymous101 said:

I would say that your scheme is quite miserly only being the legal minimum. 

...but what else is on offer as part of the package, not least salary.... You really can't just pick out one element and say it is 'miserly' (minimum, yes!).

Fair enough it is part of the bigger picture and in this case the employer may offer best in sector salary.
In my experience however packages aren't usually skewed this way. Employers which pay the minimum pension required often pay towards the lower end of the expected range too. 

Malthusian

Marcon said:

Anonymous101 said:

I would say that your scheme is quite miserly only being the legal minimum. 

...but what else is on offer as part of the package, not least salary.... You really can't just pick out one element and say it is 'miserly' (minimum, yes!).

I agree with Anonymous101. If a company is paying the minimum pension contribution it is unlikely to be so they can pay more generous salaries in lieu. Pensions are a tax-efficient way of rewarding employees as long as they value it... and if they don't they won't join, which means they'll be doing part of their work for you for free.

[Deleted User]

molerat said:

Are you likely to get more out of the legal minimum of 5% + 3% on maybe a limited portion of earnings or 9.6% + 20.68%, let me think about that one !

is 20.68% what the nhs employer contribution equates to?

[Deleted User]

dunstonh said:

Considering new job and its 5% me and 3% from employer. Is this considered good?

That is the minimum required under auto enrolment.  It is the default effectively.   The minimum cannot be considered good.  Lots of employers go beyond that minimum.

Also, and I know the NHS pension is way different - I contribute 9.6% to that at the moment in current job. How does this compare?

Overall, the NHS pension would cost around 30% of your salary to replicate.   i.e. you would need to up that 5%+3% to around 30% to get a similar end pension.  Plus, arrange a life assurance policy to replace the death in service.  The NHS pension is not as good as it was but it is still in the gold standard category.

Also, if I did leave would my NHS pension be frozen?

No.  The NHS pension cannot become frozen. It will become deferred.

Marcon said:

Anonymous101 said:

I would say that your scheme is quite miserly only being the legal minimum. 

...but what else is on offer as part of the package, not least salary.... You really can't just pick out one element and say it is 'miserly' (minimum, yes!).

Marcon said:

Anonymous101 said:

I would say that your scheme is quite miserly only being the legal minimum. 

...but what else is on offer as part of the package, not least salary.... You really can't just pick out one element and say it is 'miserly' (minimum, yes!).

yeh was aware its never going to be as good as nhs pension I just wondered how it sat in general. Not great seems to be the consensus.

[Deleted User]

BTW - to make things easier its my wife with this job not me.
I'm wondering. 5% of your money plus 3% of theirs. On income of £1500 a month (its part time) how much are you getting in saved tax/employer contribution/

I have to pay my own employer NI so any pension contribs I make are saving me about 55% tax and NI. Might be more worthwhile for me to pay in more?

Albermarle

5% of £1500 = £75 + £18.75 tax relief
3% of £1500 = £45 
So in total = £138.75 a month .
If the employer operates a salary sacrifice scheme for pension contributions she will save some on National Insurance payments as well .

AlanP_2

Albermarle said:

5% of £1500 = £75 + £18.75 tax relief
3% of £1500 = £45 
So in total = £138.75 a month .
If the employer operates a salary sacrifice scheme for pension contributions she will save some on National Insurance payments as well .

If it's net pay won't it be £75 including the tax relief of £15?

Malthusian

[Deleted User] said:

I'm wondering. 5% of your money plus 3% of theirs. On income of £1500 a month (its part time) how much are you getting in saved tax/employer contribution/

Is it 5% / 3% of her whole earnings, or only those above the auto-enrolment threshold? This has been asked before but I don't think it's been answered.

webnibbler

Also worth investigating if the employer passes any NI savings on to add to the contribution. Some more generous employers pass on 100% of their employer NI savings (13.8% of employee contribution). This will add a little more on top of the 3%.

If they don't then it's definitely on the stingey side.

Albermarle

AlanP_2 said:

Albermarle said:

5% of £1500 = £75 + £18.75 tax relief
3% of £1500 = £45 
So in total = £138.75 a month .
If the employer operates a salary sacrifice scheme for pension contributions she will save some on National Insurance payments as well .

If it's net pay won't it be £75 including the tax relief of £15?

Yes you are right , better put my calculator away !