Not overly impressed

doris540

Following a review of the feedback received and the overall benefit to our colleagues, the Company has now decided to go ahead with the proposed pension changes highlighted below:  • Changing the pension scheme into which colleagues are automatically enrolled. • Providing all eligible colleagues the option to pay their pension contributions via salary exchange • Making salary exchange the default method of paying pension contributions (subject to colleague eligibility and the ability to opt-out of the salary exchange arrangement) • Moving the pensionable pay definition for all colleagues to Basic Salary  • Moving from ‘Relief at Source’ to a ‘Net Pay’ arrangement • Removing a share of employers National Insurance saving from Salary Exchange  

This is taken from a email about my OH pension, their pension up to now has been based on bonuses and overtime etc and as far as I understand is now only going to be based on net salary not gross which am i right in thinking they will get no tax relief, The company also as it stands are only paying the bare minimum 3% this will also obviously decrease been based only on net salary, The company have up to now used Nest and are now going to use Aviva. It seems its been recommended to transfer the Nest funds we have accumulated into Aviva in due course. All this just means far less will be paid into the pensions althou obviously the employee can pay what they want off their own back so to speak

dunstonh

The company have up to now used Nest and are now going to use Aviva.

At least that will be a positive change.

All this just means far less will be paid into the pensions althou obviously the employee can pay what they want off their own back so to speak

Not unsurprising given the political decisions of the current and most recent previous Government. There were always going to be consequences to crucifying companies.    

Aretnap

There are good things and bad things in that Email.

Salary Exchange aka Salary Sacrifice is by far the best way for an employee to pay into a pension. It means saving both tax and national insurance on their contributions. They do not technically get tax relief, but that's because there is no tax to relieve - money goes straight from the payroll department to your pension, without the taxman ever seeing it.

Nest are a pension provider of last resort - they take 1.8% of every contribution when it is paid in, which very few other providers do. Without checking the details of the Aviva pension, it is pretty likely that it will have lower overall fees and a wider choice of funds than NEST, which is a win.

Only paying employer contributions on basic salary rather than overtime etc - boo!

Not paying the employer NI contributions that the company saved through salary sacrifice - also boo, though it sounds like only a subset of employees were eligible for that under the old system anyway.

So you can take a glass half empty or a glass half full view of the changes, whether it works out better for you overall will depend on a number of different factors and there will probably be both winners and losers in the company.

Marcon

Aretnap said:

Not paying the employer NI contributions that the company saved through salary sacrifice - also boo, though it sounds like only a subset of employees were eligible for that under the old system anyway.

There does seem to be a mindset on this forum that somehow employees are entitled to any NI saving the employer makes by letting them use salary sacrifice. Maybe keeping the employer in the best possible financial shape to ensure employees still have jobs...quite the opposite of 'boo'. 

Aretnap

Marcon said:

Aretnap said:

Not paying the employer NI contributions that the company saved through salary sacrifice - also boo, though it sounds like only a subset of employees were eligible for that under the old system anyway.

There does seem to be a mindset on this forum that somehow employees are entitled to any NI saving the employer makes by letting them use salary sacrifice. Maybe keeping the employer in the best possible financial shape to ensure employees still have jobs...quite the opposite of 'boo'. 

I think you might have taken the "boo" a little more seriously than was intended there. Simply meant as a shorthand for the fact that it's obviously a negative for the employees converned, at least when seen in isolation. Not intended as a comment on the ethics of the business or its broader financial situation etc 

westv

Just a very minor point but it might have been better to have just updated any previous post on this. At the moment, I feel like I have dropped into the middle of a conversation.

Aretnap

Seems to be related to this thread, which contains some useful discussion around pensionable/non pensionable pay, so it would make sense to merge them. 

https://forums.moneysavingexpert.com/discussion/6626902/company-moved-goal-posts/p1

ali_bear

You could make a case for a pay rise that you rightfully deserve, if you can present them with the precise figures that show how much worse off you are, per year, as a result of these changes to your pension arrangement. Be polite but firm and stick to the facts in that discussion (have it on paper).