Pension Discussion

Cobbler_tone

pterri said:

Cobbler_tone said:

michaels said:

Hoenir said:

Fink_Nottle said:

Moneycraver05 said:

I worked in a university from 2018-2023 an paid in to their pension scheme for 4 years of this. I contributed 6.5% and my employer contributed 16.9% approx (great!... or so I thought!).

I always find it a bit odd when employers brag about how much they contribute to a DB pension. Perhaps they're obliged to do this, but it's not especially useful to the average future pensioner (and I wonder if this had added to the OP's confusion a little).

It's a fact not a brag. As it's forms part of the employee's remuneration package. Just happens that the cash goes directly into a pension scheme rather the pay packet. There's also benefits such as dependent's pension and death in service benefits. 

Calculate what it would cost to prove the same level of benefits yourself and you'll appreciate those provided by the employer's group scheme. 

But the remuneration is the amount of DB promised, not how much the employer is accruing towards paying out on that promise.

Employer expense was one of the main reasons most schemes are now closed, or at least closed to new members. There is an internal fairness argument I guess. Ours closed to new members in 2005 and altogether in 2021, I was pleased to get another 16 years in. I calculated the 'loss' to me of around £300k for my last 13 years to 65. The business were contributing an equivalent of 48% of my salary and now 12%. They put tens of millions into the scheme to bring it back to health and now liabilities are under control with deferred and declining membership.
They are the gold standard and in most cases people would be crazy to try and transfer out of them for some £'s.

My employer is now able to drop their contribution dramatically (to the minimum allowed) because it was so much in surplus AND the fund has derisked some of its investments. My benefits have stayed the same, so yes while it’s interesting to see what the employer contribution is it makes no difference to the pension obligation. 

Ours is in surplus (only modestly by £100m in a £1.5b scheme) and I cheekily messaged the Trustee's to see if they would consider a little enhancement. Funnily enough I didn't get a reply. 

SacredStephan

Marcon said:

Depends on earnings. Contributions edge into double digits for those earning close on £50K and above: https://www.nhsbsa.nhs.uk/member-hub/cost-being-scheme

Thank you for pointing out my mistake.