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  • FIRST POST
    • si2winit
    • By si2winit 9th Aug 18, 7:38 PM
    • 53Posts
    • 14Thanks
    si2winit
    What is a ‘good’ company contribution on DC scheme
    • #1
    • 9th Aug 18, 7:38 PM
    What is a ‘good’ company contribution on DC scheme 9th Aug 18 at 7:38 PM
    Hi everyone

    My company is going through a pensions review at the moment. I’m also attending some sessions with my HR director to discuss it.

    Currently if I pay 5% the company pays in 10% rising to 12% after 15 years contributions and 14% after 25 years.

    Looking to gauge where this is relating to other pensions. So if you are comfortable please drop a note of your company contribution percentage on DC schemes.

    Thanks in advance
Page 1
    • westv
    • By westv 9th Aug 18, 7:59 PM
    • 4,647 Posts
    • 2,238 Thanks
    westv
    • #2
    • 9th Aug 18, 7:59 PM
    • #2
    • 9th Aug 18, 7:59 PM
    Mine have been 20% + 5% minimum employee contribution and 18.5% with no minimum employee contribution.
    • tacpot12
    • By tacpot12 9th Aug 18, 8:00 PM
    • 1,647 Posts
    • 1,400 Thanks
    tacpot12
    • #3
    • 9th Aug 18, 8:00 PM
    • #3
    • 9th Aug 18, 8:00 PM
    My employer contributed 13.5% if I contributed 10%, I thought that was very good at the time.
    • Zorillo
    • By Zorillo 9th Aug 18, 8:11 PM
    • 430 Posts
    • 282 Thanks
    Zorillo
    • #4
    • 9th Aug 18, 8:11 PM
    • #4
    • 9th Aug 18, 8:11 PM
    My current employer contributes 6%, which I consider to be poor.

    My previous employer contributed 14%. I'm lucky that the difference in salary allows me to make up the difference in pension contributions without hardship.
    Last edited by Zorillo; 09-08-2018 at 8:44 PM.
    • campbell19925
    • By campbell19925 9th Aug 18, 8:13 PM
    • 146 Posts
    • 181 Thanks
    campbell19925
    • #5
    • 9th Aug 18, 8:13 PM
    • #5
    • 9th Aug 18, 8:13 PM
    I work for a pension company as an adviser and the company puts in 2%! So you should all count yourselves lucky!!
    • steampowered
    • By steampowered 9th Aug 18, 8:21 PM
    • 2,948 Posts
    • 2,927 Thanks
    steampowered
    • #6
    • 9th Aug 18, 8:21 PM
    • #6
    • 9th Aug 18, 8:21 PM
    That sounds extremely generous.

    Mine pays in a fixed 5%. My previous job matched contributions up to 6%. Both were professional jobs in central London.

    I thought most companies just paid the legal minimum - currently an employer contribution of 2%, going up to 3% next year, based on staff contributing 3% now and 5% next year.
    Last edited by steampowered; 09-08-2018 at 8:25 PM.
    • Bimbly
    • By Bimbly 9th Aug 18, 8:28 PM
    • 145 Posts
    • 128 Thanks
    Bimbly
    • #7
    • 9th Aug 18, 8:28 PM
    • #7
    • 9th Aug 18, 8:28 PM
    Company agrees to match contributions up to a maximum of 10%.

    (Not sure what the minimum is).
    • si2winit
    • By si2winit 9th Aug 18, 8:41 PM
    • 53 Posts
    • 14 Thanks
    si2winit
    • #8
    • 9th Aug 18, 8:41 PM
    • #8
    • 9th Aug 18, 8:41 PM
    I need to get a job where you work!! Thanks for the response.
    • si2winit
    • By si2winit 9th Aug 18, 8:42 PM
    • 53 Posts
    • 14 Thanks
    si2winit
    • #9
    • 9th Aug 18, 8:42 PM
    • #9
    • 9th Aug 18, 8:42 PM
    Thanks everyone, a bit of a mixed bag.
    • westv
    • By westv 9th Aug 18, 9:25 PM
    • 4,647 Posts
    • 2,238 Thanks
    westv
    Some really mean contributions in there.
    • Shimrod
    • By Shimrod 9th Aug 18, 10:14 PM
    • 968 Posts
    • 526 Thanks
    Shimrod
    From the FT: https://www.ft.com/content/e88d7192-790a-11e7-a3e8-60495fe6ca71


    In 2012:

    The amount going into money purchase schemes (now known as defined contribution or DC) was about half this rate in 2012. The 9.7 per cent total was split about 2:1 between employer and member (6.6 per cent to 3.1 per cent).



    With the introduction of auto-enrollment:

    By 2015 the average total going into DC schemes was 4 per cent of pay, split roughly 2.5 per cent by employers and 1.5 per cent by members.



    I would generally count an employer contribution 10% and upwards as generous (and that's more than I get)
    • dunstonh
    • By dunstonh 9th Aug 18, 10:18 PM
    • 96,058 Posts
    • 63,875 Thanks
    dunstonh
    I once had a 15% employer contribution for some years. Although my first job had a non-contributory DB scheme (worth around 35% of my earnings if you had to put a cost on it).
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Filo25
    • By Filo25 9th Aug 18, 10:29 PM
    • 1,795 Posts
    • 2,623 Thanks
    Filo25
    Mine only matches employee contributions up to 5%
    • westv
    • By westv 9th Aug 18, 10:47 PM
    • 4,647 Posts
    • 2,238 Thanks
    westv
    I once had a 15% employer contribution for some years. Although my first job had a non-contributory DB scheme (worth around 35% of my earnings if you had to put a cost on it).
    Originally posted by dunstonh
    My first job had a DB scheme but it didn't start until you were 25 so, whilst I got 9 years of 1/60, I missed out on another 9 years prior to that.
    • kidmugsy
    • By kidmugsy 9th Aug 18, 10:54 PM
    • 12,186 Posts
    • 8,630 Thanks
    kidmugsy
    A 30-something in my family can contribute up to 5% and gets it double-matched up to 10%. That's on base salary and bonus. It's done by salary sacrifice.
    Free the dunston one next time too.
    • sandsy
    • By sandsy 9th Aug 18, 11:39 PM
    • 1,413 Posts
    • 866 Thanks
    sandsy
    I once had a 15% employer contribution for some years. Although my first job had a non-contributory DB scheme (worth around 35% of my earnings if you had to put a cost on it).
    Originally posted by dunstonh
    I had a non-contributory DB for my first 10 years of employment too.

    My employer currently pays 15% - made up of 12% base plus 3% matched, plus half the NI savings via salary sacrifice. But younger staff have a lower base.
    • Notfarfromtheborder
    • By Notfarfromtheborder 10th Aug 18, 6:53 AM
    • 121 Posts
    • 163 Thanks
    Notfarfromtheborder
    9% base with no contribution
    extra 2% matched
    All by SS, all NI returned on sacrificed amount


    Worth about Ł10K into the pension from the above amounts alone
    • Novice investor101
    • By Novice investor101 10th Aug 18, 7:26 AM
    • 322 Posts
    • 823 Thanks
    Novice investor101
    My old employer matched up to 7.5%. they had a DB scheme that I was in for 10 years that closed. My current employer pays in 14% to my 8%. That's the highest matching amount, it goes down on a sliding scale if I reduce my contributions. Current all via sal sac.
    • Shimrod
    • By Shimrod 10th Aug 18, 7:55 AM
    • 968 Posts
    • 526 Thanks
    Shimrod
    Here's some more figures on contribution rates by sector. These are from 2009, so bear in mind the averages have dropped since auto-enrolment came in. This is from the 2009 Aon Benefits and Trends survey.



    Key findings:
    Average total contribution across UK sectors is 9.7%.


    Average employer contributions across the UK are currently 6.2% of an employee!!!8217;s salary


    Those in financial services fare best with a combined pension pot of 11% (a 8.4% employer contribution but only 2.6% employee).


    Those in leisure and travel are worst off with a combined pension pot of 7% (a 4.1% employer contribution and 2.9% employee).


    Employers across all sectors contribute at least 4%.


    The retail sector displays the least disparity between employer and employee contributions. 4.3% and 4% respectively.
    • TcpnT
    • By TcpnT 10th Aug 18, 7:59 AM
    • 171 Posts
    • 111 Thanks
    TcpnT
    Before I I retired last year my company doubled employee contributions up to 8%. So for an 8% employee contribution they contributed 16% - total 24% of all salary and bonuses. This was a very generous scheme but it was with a major international oil service company and their scheme was intended to offer similar benefits to the major oil companies.
    I also benefited from some legacy terms which were no longer on offer to new employees. Contributions were the same for recent starters but were paid on base salary only which was a massive difference.
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