Company doesn't contribute towards pension

mgpantufa

My company doesn't contribute towards pension. It gives any employee a benefit fund on top of our base salary, from which we can choose to put into our pension, but does not match in any way anyone's contributions towards pension... Is this commonplace?

molerat

Generally with few exceptions your employer must by law contribute to a pension.

https://www.gov.uk/workplace-pensions/joining-a-workplace-pension

https://www.moneyhelper.org.uk/en/pensions-and-retirement/auto-enrolment/automatic-enrolment-an-introduction#

https://www.thepensionsregulator.gov.uk/en/employers

Scot_39

Not sure how common.

But one of my former employers did something similar for at least a while for a DC scheme.  (But I believe now enroll all new starters).

But that was a more direct swap - iirc was 8, then post salary sacrifice 10% employers gross contribution to pension or 10% effective salary boost - but then that was subject to ni and income tax.

And there was no salary matching component at all - the 10% was a fixed flat rate.

If you didn't take the 10%, you couldn't contribute to the scheme, but you could take it and pay in zero, think 5% was suggested / recommended scheme default, or could up - some put 10-20% in from salary instead.

That sat iirc on top of other optional / non optional grade/ level dependent employee benefits - like health care, health club discounts etc in a separate packaged amount iirc.

A lot of the recent graduates took the pension as salary  - as struggling with costs of student debt and rents.

MX5huggy

This scheme may not be legal on face value. But don’t cut your nose off to spite your face. If the benefits pot is say 10% to spend how you like. Then getting it closed down so that you get 3% added to a pension that you have to contribute 5% to would be foolish. 

Tommyjw

mgpantufa said:

My company doesn't contribute towards pension. It gives any employee a benefit fund on top of our base salary, from which we can choose to put into our pension, but does not match in any way anyone's contributions towards pension... Is this commonplace?

Are you quite sure you dont have a base level of contributions, which they match, and you can use this top up fund to pay in extra but they just dont match the extra?

It would seem incredibly odd to me that a company has all of this set up (indicating a fairly decent complexity HR system, not just some two man job down the road) but wouldnt be following the law on pension contributions.

Scot_39

Do wonder how this scheme interacts with auto enrollment law.

Pretty convinced that's why the scheme above I referenced disappeared, but never saw it in writing anywhere explicitly from memory  - via HR or union.

xylophone

Are you quite sure you dont have a base level of contributions, which they match, and you can use this top up fund to pay in extra but they just dont match the extra?

Like this?

https://www.accountancyage.com/2012/07/23/rbs-starts-pension-auto-enrolment-with-a-whisper/

RBS already operates a form of auto-enrolment for its workforce where employees are given an additional 15% of salary for its flexible benefits package. Four percentage points of this is automatically put into the pension scheme.

mgpantufa

Tommyjw said:

mgpantufa said:

My company doesn't contribute towards pension. It gives any employee a benefit fund on top of our base salary, from which we can choose to put into our pension, but does not match in any way anyone's contributions towards pension... Is this commonplace?

Are you quite sure you dont have a base level of contributions, which they match, and you can use this top up fund to pay in extra but they just dont match the extra?

It would seem incredibly odd to me that a company has all of this set up (indicating a fairly decent complexity HR system, not just some two man job down the road) but wouldnt be following the law on pension contributions.

Indeed that's the case. Exactly only what I contribute goes to the pension. Also I can clearly see on our internal system "employer percentage - 0%".
The minimum I can contribute is 1% (not even obliged to do 3% or 4% like in the RBS case @xylophone mentioned above).

Though I wonder if they change it to make the minimum 3% it would then be compliant? In which case it wouldn't really change anything as one always contributes at least 3%...