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

Anonymous101

JustAnotherSaver said:

Strange this. Wonder if most people on here are actually in decent paid jobs. Maybe. Maybe not. 
I suspect most that come here have an interest in I vestments, saving, DIY money managing etc and maybe these people are generally not the bottom-line kind of people. Again, just wonderings, I could be wrong. 

My workplace pension is bare minimum. They'd pay me zero if they could get away with it. Those I know are also paid the bare minimum. In fact I only know of 1 person really who is anything above minimum, the rest are minimum. 
My social circle does not really involve people earning 30k, 40k, 50k etc. We are generally minimum wage earners or maybe slightly above but not much. Coincidence that our pensions are as little as possible? Maybe, maybe not. 

I don't think its strictly true that people on here are any better off on average than a cross section of society. Sure most of the regulars have an interest in personal finance of some sorts and my feeling is this usually doesn't correlate with minimum wage earners. There are exceptions of course to that though.

I absolutely don't think its a coincidence that better paying jobs tend to have better pensions. As you go up the pay scale very generally the employers need to compete more for talented workers, that's why they are paid more and its also why pensions are better. I'm sorry to say I agree with you, employers see minimum paid workers as more replaceable than higher paid workers and some will push salary and pensions etc as low as is legal. Its absolutely not on but you can see how this happens when there are many more workers than positions.

philveller

My employer provides 10% and requires a minimum 4% employee contribution to get that 10%, they will pay into any private personal pension it does not have to be the company workplace pension, I am getting close to retirement and contribute 24% of my salary for a total 34% combined contribution.
I am going to increase my personal contribution over the next few years to about 35% of salary for a combined total of 45%, that's the penalty for doing it the wrong way round and not saving enough when I was a youngster

barnstar2077

philveller said:

My employer provides 10% and requires a minimum 4% employee contribution to get that 10%, they will pay into any private personal pension it does not have to be the company workplace pension, I am getting close to retirement and contribute 24% of my salary for a total 34% combined contribution.
I am going to increase my personal contribution over the next few years to about 35% of salary for a combined total of 45%, that's the penalty for doing it the wrong way round and not saving enough when I was a youngster

Yep, I am currently paying in half my salary for the same reason.  At least we are doing something about it though! :  )

Dazza1902

barnstar2077 said:

philveller said:

My employer provides 10% and requires a minimum 4% employee contribution to get that 10%, they will pay into any private personal pension it does not have to be the company workplace pension, I am getting close to retirement and contribute 24% of my salary for a total 34% combined contribution.
I am going to increase my personal contribution over the next few years to about 35% of salary for a combined total of 45%, that's the penalty for doing it the wrong way round and not saving enough when I was a youngster

Yep, I am currently paying in half my salary for the same reason.  At least we are doing something about it though! :  )

Likewise, about 900 working days left. Not thst I'm counting. Lol

robatwork

dunstonh said:

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.

Sorry to jump in but I have a related query. A new teacher starting this year - what is the "finger in the air" figure for what their pension is worth similar to the NHS's 30%?

Retireinten

robatwork said:

dunstonh said:

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.

Sorry to jump in but I have a related query. A new teacher starting this year - what is the "finger in the air" figure for what their pension is worth similar to the NHS's 30%?

I would say that most public sector DB schemes equate to around the 30% of salary figure.  The teachers pension is a very, very good scheme but if you want to retire early and avoid significant actuarial reductions to your DB pension you will probably still need to save more outside of your DB pension.   

Retireinten

I'm a long standing LGPS member, forever grateful to my 19 year old self for getting a job in local government.  At 45, with a bit of part time working thrown in for a few years and having earned a decentish salary in the region of £32-£50k during my working life, my pension at 60 is worth £14,300 a year plus £21k lump sum.... that's if I stop paying into the scheme tomorrow and that value is in today's money, it will grow with inflation. I'm still in the scheme so this will continue to grow! 

Husband has worked for the same employer since he was 18 and he's now 45, he loves his job which is worth a huge amount but he gets the minimum 'everything'.  So it's 5% employee, 3% employer pension, 20 days holiday, 47.5 hour basic work week. His salary is around £42k plus free transport but for the job he does (and the hours) I would hazard a guess that is very much on the low side... and he pays around 20% into his pension to make up for his dismal pension contributions! 

Heisenberg01

Employee 6% employer 30% here, we moved from DB to DC and they gave us the 30% to make up for it.

thickasabrick

robatwork said:

dunstonh said:

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.

Sorry to jump in but I have a related query. A new teacher starting this year - what is the "finger in the air" figure for what their pension is worth similar to the NHS's 30%?

Did the calculations recently comparing my private sector contributions to public sector.
For me 5% employer and 4% personal contribution against 23.68%  employer and 11.7% personal for the teachers pension.
If I use salary sacrifice my company pays the additional 13.8% of the sacrificed amount that they save on national insurance to it as well.
I default to a minimum of 10% personal through salary sacrifice and I upped this to 20% after realising the difference against public sector. In addition I contribute on an add hoc basis to a separate personal pension, aiming to hit the 30%.
NOTES
On the Teachers pension website.
Members -> Working Life - > Paying In
Has a table with the "Member Contribution Rate" starting at 7.4 % to 11.7 %
News bulletin Employer contribution change from 1 September
"Employer rate should increase to 23.68% of a member’s contributory pay."

hugheskevi

thickasabrick said:

For me 5% employer and 4% personal contribution against 23.68%  employer and 11.7% personal for the teachers pension.
If I use salary sacrifice my company pays the additional 13.8% of the sacrificed amount that they save on national insurance to it as well.
I default to a minimum of 10% personal through salary sacrifice and I upped this to 20% after realising the difference against public sector. In addition I contribute on an add hoc basis to a separate personal pension, aiming to hit the 30%.
NOTES
On the Teachers pension website.
Members -> Working Life - > Paying In
Has a table with the "Member Contribution Rate" starting at 7.4 % to 11.7 %
News bulletin Employer contribution change from 1 September
"Employer rate should increase to 23.68% of a member’s contributory pay."

The 23.68% figure includes 7.2 percentage points to correct the notional deficit calculated as at 31 March 2016. It is unclear why this should be included in assessment of value of newly accrued pension? 

It also contains allowance for the effect of a cost cap breach, although that was based on figures prior to inclusion of McCloud costs in the cost cap assessment.

The employer contribution rate required to fund newly accruing benefits is 13.1%
Source: 2016 Teacher's Pension Actuarial Assessment