Is a minimum legal pension contribution the 'norm'?

33scott

For me the scheme is 
Employee 3% - Company 5
Employee 4% - Company 6
Employee 5% - Company 7.5
Employee 6% - Company 9
Employee 7% - Company 10.5% (the max they will do)

This was a scheme set after the DB closed 8 years ago.

billy2shots

dunstonh said:

Employers that value staff and need to attract high-quality staff tend to pay above the minimum.  Employers that do not value staff or don't need to attract quality staff tend to pay the minimum.

I have to disagree with that simplified view of employment. 
There are many employers who can not afford to pay more than the minimum given current economic conditions.

Fast moving wage increases, added employer NICS, and rising inflation doesn't always mean a simple choice of pay higher employee pension contributions or pocket more money in the form of profit.

Above all, employers must stay solvent otherwise an extra percentage or two of contributions would be the least of the employee's worries. 

Thrugelmir

Brie said:

Many employers have over the last decade or two reduced/devalued the pensions they offer their staff.  

Gordon Browns's 1997 raid on DB schemes changed the landscape overnight. What was already an expensive staff benefit became prohibitively costly for many employers, particularly those in the medium sized category. A legacy of underfunding has remained for many schemes ever since. 

kinger101

billy2shots said:

dunstonh said:

Employers that value staff and need to attract high-quality staff tend to pay above the minimum.  Employers that do not value staff or don't need to attract quality staff tend to pay the minimum.

I have to disagree with that simplified view of employment. 
There are many employers who can not afford to pay more than the minimum given current economic conditions.

Fast moving wage increases, added employer NICS, and rising inflation doesn't always mean a simple choice of pay higher employee pension contributions or pocket more money in the form of profit.

Above all, employers must stay solvent otherwise an extra percentage or two of contributions would be the least of the employee's worries. 

I can appreciate that pensions can be costly when you're in a highly competitive market, but I'd say what dunstonh said is pretty much true.  Industries that need to retain their staff offer good pensions as well as other long-term retention perks.  And these incentives tend to increase the higher up the ladder you climb.

The further up the ladder you go, the cost and risk of finding replacement employees gets higher.  

Brie

Also where long term employees can remain in an old DB scheme by offering a decent DC scheme employers can entice them to move into that instead.  I even regularly get emails from my employer asking if I want to switch from the old DC scheme where they pay 17% to the newer one where they only pay 10%.  Never have, never will.

MEM62

My previous employer only contributed 3%.  My current employer contributes 6% and I am currently contributing 25%.   

Money_Mad

My current employer matches up to 6% and adds +2% i.e. if you 4% they will pays 6%, if you pay 6% they will pay 8%

That is on all of the salary not just the amount above the threshold.

lisyloo

Depends on the employer. I work for a small company and benefits are minimal. I asked for money to compensate. I love the job so that’s fine.
You need to weigh it up when you take the job.

MallyGirl

With my employer 
If I contribute 3% they contribute 7%
If I contribute 4% they contribute 8%
If I contribute 5% they contribute 10%
of the whole salary, not just that above the statutory contribution threshold.
Via sal sac but I don't get the employer NI saving (OH does).

swindiff

I pay 9.8% and my employer pays in 21.4%.  This is for a DB scheme though.