Wording of pension clauses in employment contract

aroominyork

Can someone please confirm whether, following recent years’ changes to pension regulations/legislation, the following wording is still correct for an employment contract?

-          The Organisation is currently using [name of pension scheme] in respect of its duties under Part 1 of the Pensions Act 2008. Membership of the scheme is subject to the rules of the scheme as amended from time to time. The Organisation reserves the right to vary or discontinue any scheme in place from time to time.

-          Your enrolment into the scheme will be postponed until you successfully complete your probationary period or for three months, whichever is the shorter. After enrolment into the scheme, payments reflecting the employer’s and the employee’s contributions will be paid into the scheme backdated to the date when your employment commenced.

-          The Organisation shall contribute 6% of your gross salary into the pensions scheme on a monthly basis. 5% of your gross salary will be paid into the pension scheme on a monthly basis as the employee’s contribution.

Many thanks.

Sandtree

What are your concerns?

aroominyork

Sandtree said:

What are your concerns?

I should have explained the reasons.

I am taking up a job at a new UK charity that works in Russia. The Russians are providing the employment contract. I suggested that, to get the terms aligned with UK employment law, I provide a contract template. The above wording is taken from the contract used at the charity I recently left, but we had not taken on any new staff for a few years, nor had the wording checked in recent years by an employment lawyer. Hence wanting to know if the wording is correct.

General_Grant

aroominyork said:

Can someone please confirm whether, following recent years’ changes to pension regulations/legislation, the following wording is still correct for an employment contract?

-          The Organisation is currently using [name of pension scheme] in respect of its duties under Part 1 of the Pensions Act 2008. Membership of the scheme is subject to the rules of the scheme as amended from time to time. The Organisation reserves the right to vary or discontinue any scheme in place from time to time.

-          Your enrolment into the scheme will be postponed until you successfully complete your probationary period or for three months, whichever is the shorter. After enrolment into the scheme, payments reflecting the employer’s and the employee’s contributions will be paid into the scheme backdated to the date when your employment commenced.

-          The Organisation shall contribute 6% of your gross salary into the pensions scheme on a monthly basis. 5% of your gross salary will be paid into the pension scheme on a monthly basis as the employee’s contribution.

Many thanks.

Well the percentage contributions meet or exceed the requirements.
Back-dating is quite generous - but it could be difficult to take 3 months contributions from one month's pay.

aroominyork

General_Grant said:

aroominyork said:

Can someone please confirm whether, following recent years’ changes to pension regulations/legislation, the following wording is still correct for an employment contract?

-          The Organisation is currently using [name of pension scheme] in respect of its duties under Part 1 of the Pensions Act 2008. Membership of the scheme is subject to the rules of the scheme as amended from time to time. The Organisation reserves the right to vary or discontinue any scheme in place from time to time.

-          Your enrolment into the scheme will be postponed until you successfully complete your probationary period or for three months, whichever is the shorter. After enrolment into the scheme, payments reflecting the employer’s and the employee’s contributions will be paid into the scheme backdated to the date when your employment commenced.

-          The Organisation shall contribute 6% of your gross salary into the pensions scheme on a monthly basis. 5% of your gross salary will be paid into the pension scheme on a monthly basis as the employee’s contribution.

Many thanks.

Well the percentage contributions meet or exceed the requirements.
Back-dating is quite generous - but it could be difficult to take 3 months contributions from one month's pay.

Why might it be difficult to take three months' contributions - do you mean the impact on the employee's take home pay in Month 4, or is there a legal/process problem?

Also, is the 2008 Act still the correct one to reference in contracts?

Savvy_Sue

The deferral is fine in principle, but in practice we don't backdate, AND staff can ask to join early.

Also is it a total of 11% going into the scheme? That exceeds the requirements for both employer and employee. Is the employer OK with that?

aroominyork

Savvy_Sue said:

The deferral is fine in principle, but in practice we don't backdate, AND staff can ask to join early.

Also is it a total of 11% going into the scheme? That exceeds the requirements for both employer and employee. Is the employer OK with that?

So is it legally wrong to say that enrolment will be after the probationary period?

Yes, total 11%. I know it is above the minimum but the employer has agreed to that.

General_Grant

aroominyork said:

Savvy_Sue said:

The deferral is fine in principle, but in practice we don't backdate, AND staff can ask to join early.

Also is it a total of 11% going into the scheme? That exceeds the requirements for both employer and employee. Is the employer OK with that?

So is it legally wrong to say that enrolment will be after the probationary period?

Yes, total 11%. I know it is above the minimum but the employer has agreed to that.

There are exceptions but three months is the normal maximum deferment for enrolment.

Marcon

aroominyork said:

Savvy_Sue said:

The deferral is fine in principle, but in practice we don't backdate, AND staff can ask to join early.

Also is it a total of 11% going into the scheme? That exceeds the requirements for both employer and employee. Is the employer OK with that?

So is it legally wrong to say that enrolment will be after the probationary period?

No, it's fine, if the upper limit for deferring enrolment is a maximum of 3 months.

Manxman_in_exile

aroominyork said:

...
I am taking up a job at a new UK charity that works in Russia. The Russians are providing the employment contract. I suggested that, to get the terms aligned with UK employment law, I provide a contract template. ...

Have to ask... why on earth would a new UK charity allow their employees to be employed on a contract provided by "The Russians"?  (And why are you attempting to draft it?  Will they take any notice?).

Are you actually working in Russia?  Is your employment going to be subject to UK employment law or Russian  ( )?  If the former, why are "The Russians" providing the contract?  If the latter, what do you know about Russian employment law?

I would not be looking to have any input to the employment contract without first seeking my own independent, paid for, legal advice.  I certainly would not be attempting to provide a DIY template myself even if based on an existing contract (the suitability of which I clearly don't have a clue about).  Worrying about pensions might be the least of my problems.

(On a previous thread about having a charity as an employee, I recounted a wise man once telling me to never work for a charity.  They aren't always employee friendly... )

aroominyork

Well, Manxman, to satisfy your curiosity... it is a charity that supports healthcare in Russia and various other countries. I will, initially, be the only staff member. There is one UK Trustee and two Russian Trustees, and one of the Russians looks after the 'business' issues. They sent an offer letter which was 'Russian' in style, and since I will be employed under UK law, I want a contract that aligns with UK law and practice, as well as to get the organisation's governance into good shape from Day 1. Hence I am adapting the contract from the charity I have just left which was, some years ago, drafted by an employment lawyer. I was Chief Exec at the last charity and will be at the new one. So I am not stumbling in the dark, they agreed with my suggestion that I provide a contract template, and I see plenty of upsides and no significant risks. (And you can that wise man to kindly sod off!)