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Comparing pensions
sreppaw
Posts: 61 Forumite
I'm trying to compare a package offered by a new employer to my current one.
Currently I have a stakeholder plan, I pay 6%, they pay 9%
The prospective employer offers a 2% non-contributory pension.
I am not sure how to compare these, ideally I would like to contribute more than the 2%.
Can I also contribute into the non-contributory pension? (Or would I nead to open another stakeholder? Or could I keep this one but move it away from the group scheme?)
Currently I have a stakeholder plan, I pay 6%, they pay 9%
The prospective employer offers a 2% non-contributory pension.
I am not sure how to compare these, ideally I would like to contribute more than the 2%.
Can I also contribute into the non-contributory pension? (Or would I nead to open another stakeholder? Or could I keep this one but move it away from the group scheme?)
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Comments
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I think you need to give more detail of the new employers scheme for a proper answer. This is particularly confusing ...
Does that mean you pay 2% and the employer pays nothing? Or the employer pays 2% and you pay nothing? Or is it a final salary scheme where the employers contribution isn't defined because the benefits you receive are?The prospective employer offers a 2% non-contributory pension.
If it's the former there is probably no advantage to joining and you may be better with your own pension arrangements. If it's the latter it could be a very valuable employee benefit. If it's the middle one, take the free money and weigh up how good the scheme is.
Without clarification it's impossible to know whether it's a complete waste of space or you should grab their hand off!!0 -
Sorry I don't really know the full details (I will have ask at the interview if there is an HR person there). I think it means the company contributes 2% to a final salary (defined benefits) pension.
If it is not as good as what I get now then I would ask for compensation in the basic salary.0 -
What you pay or the employer pay has no impact on the end result with a final salary scheme. Your and the employers contribution just ensures there is money in the pot to fund the pensions. Final salary schemes are based on years of service. So, if the scheme was say an 1/80ths and you did 30 years with this company you would get 30/80ths of your pensionable salary. 30/80s = 37.5%.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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An 80ths scheme is pretty poor though, I'd not want to do 30 years with an employer who valued me that little !Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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!!!!!!_here wrote: »An 80ths scheme is pretty poor though, I'd not want to do 30 years with an employer who valued me that little !
By itself it's not enough but if its non-contributory then you cannot complain (although your salary may be based on provision of a final salary scheme). I would take a final salary scheme if I had one available. However, it wouldnt be the only provision as I dont want to be poor in retirement.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I would take a final salary scheme if I had one available.
I fully agree, but I'd be looking for an employer with a 65ths scheme as a minimum. 80ths seems very meagre.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
!!!!!!_here wrote: »I fully agree, but I'd be looking for an employer with a 65ths scheme as a minimum. 80ths seems very meagre.
Most 80ths schemes come with a 3x annual pension lump sum, considered to be broadly comparable to a 60ths scheme withno lump sum0 -
Most 80ths schemes come with a 3x annual pension lump sum, considered to be broadly comparable to a 60ths scheme withno lump sum
Maybe I'm just lucky then, being in a (career average now) 65ths scheme with a 3x lump sum available.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
Was it 65ths + lump sum before it changed to a career average? If so that is generous, who should I have started working for 20 years ago :-)0
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Was it 65ths + lump sum before it changed to a career average? If so that is generous, who should I have started working for 20 years ago :-)
It used to be 60ths + lump sum when it was Final Salary !Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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