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    • 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 2
    • Brynsam
    • By Brynsam 10th Aug 18, 8:00 AM
    • 1,735 Posts
    • 1,269 Thanks
    Brynsam
    Don't forget to set this in the context of the overall remuneration package. A 'mean'(!) employer contribution of 'only' x% might look better if there's a bonus which is regularly in the order of 50% of salary, say... There's nothing magic about remuneration being paid as a pension contribution, albeit there are tax advantages.
    • Turpinr
    • By Turpinr 10th Aug 18, 8:41 AM
    • 17 Posts
    • 10 Thanks
    Turpinr
    I pay 6%, employer pays 5.6%
    • 232607
    • By 232607 10th Aug 18, 9:00 AM
    • 124 Posts
    • 62 Thanks
    232607
    Mine pays 15% to my 5%.
    • lisyloo
    • By lisyloo 10th Aug 18, 9:04 AM
    • 22,838 Posts
    • 11,399 Thanks
    lisyloo
    My employer contribution is 3% which I think is low.


    However they do salary sacrifice which allows me 12% NI and they pass on 13.8% which is their employers NI - so total 25.8% of MY contribution.


    I make good use of that and therefore get 14.19% of salary in NI.
    • tiernsee
    • By tiernsee 10th Aug 18, 9:07 AM
    • 260 Posts
    • 303 Thanks
    tiernsee
    Mine is a double matched scheme up to 7.5% (so for most of us we put in the maximum and they put in 15%). We used to have a really good DB scheme but this went around 10 years ago
    • blisteringblue
    • By blisteringblue 10th Aug 18, 9:09 AM
    • 1,080 Posts
    • 1,963 Thanks
    blisteringblue
    A long time ago I had a non-contributory DB Pension, and it paid 56x CETV too. Those were the days but I know it changed after I left and didn't continue like that.

    Currently my company matches up to 8%, but I pay 12% (still getting 8% obviously)
    • Malthusian
    • By Malthusian 10th Aug 18, 9:35 AM
    • 4,971 Posts
    • 8,032 Thanks
    Malthusian
    A 'mean'(!) employer contribution of 'only' x% might look better if there's a bonus which is regularly in the order of 50% of salary, say...
    Originally posted by Brynsam
    ...especially if you can sacrifice your bonus for an employer contribution (and get NI relief on top of income tax relief).

    Like Lisyloo, I nominally only get auto-enrolment contributions, but my employer offers salary sacrifice with the full NI saving paid into the fund, so it is considerably better than it sounds.
    • Drp8713
    • By Drp8713 10th Aug 18, 9:45 AM
    • 843 Posts
    • 718 Thanks
    Drp8713
    My two private sector employers were:

    You pay 6% they pay 5%.
    And
    6% non contributory
    • PipPip
    • By PipPip 10th Aug 18, 9:51 AM
    • 125 Posts
    • 231 Thanks
    PipPip
    I pay 7% and they pay 14% plus 1% NI saving, so 22% going in. This is working for a pension company so I thought it was generous but I see others have even more generous employers!
    • bowlhead99
    • By bowlhead99 10th Aug 18, 9:56 AM
    • 8,306 Posts
    • 15,196 Thanks
    bowlhead99
    Mine pays 5% with no contributions needed by the employee (though auto enrollment from next April will be 5% employer 3% employee).

    If you want to contribute you can do so by salary sacrifice, though the company doesn't gift you any of the employer's NI savings it would make (instead going to fund the admin hassle /extra complexity of the salary sacrifice vs standard scheme).

    And the salary sacrifice is only allowed up to a max of 10% of salary, anything extra you have to use 'traditional' contributions which get paid into the same pot. Or just make your own private arrangement, which is what I do
    Last edited by bowlhead99; 10-08-2018 at 10:00 AM.
    • Turpinr
    • By Turpinr 10th Aug 18, 11:07 AM
    • 17 Posts
    • 10 Thanks
    Turpinr
    Mine does salary sacrifice too
    • ex-pat scot
    • By ex-pat scot 10th Aug 18, 11:23 AM
    • 289 Posts
    • 355 Thanks
    ex-pat scot
    I've seen many schemes over the years.
    Most are sal sacrifice.
    The average for Financial services/ professional services firms on DC seemed to be around 10% matched.
    The professional services firms were a little lower- 8% max matched.
    • MallyGirl
    • By MallyGirl 10th Aug 18, 11:48 AM
    • 3,121 Posts
    • 8,155 Thanks
    MallyGirl
    Mine is by sal sac on a sliding (but weirdly non linear) scale.

    If I contribute 2% they do 4%
    me 3% them 7%
    me 4% them 8%
    me 5% them 10%

    No matching beyond my 5% contribution (I actually do 40%) and they don't give me their NI saving.
    • Mothman
    • By Mothman 10th Aug 18, 1:43 PM
    • 95 Posts
    • 22 Thanks
    Mothman
    My employer had a non contributory final salary scheme, but they closed this in 1991 and replaced it with a DC scheme to which they contributed 2.5% to my 7.5%. They even had some whizz kid FA at the one to one meetings giving us the speil about how great it was.

    I didn't understand pensions at the time and it was another 22yrs before I realised that it wasn't the greatest deal and my future retirement prospects were in serious trouble. For the last 5yrs I've been putting 40% of salary into other Personal Pensions & ISA's in an effort to undo some of the damage.
    • somethingcorporate
    • By somethingcorporate 10th Aug 18, 1:49 PM
    • 8,991 Posts
    • 8,718 Thanks
    somethingcorporate
    employer 10% for 5% of mine. I am currently contributing 19% myself (looking to bring this down...).
    Thinking critically since 1996....
    • swindiff
    • By swindiff 10th Aug 18, 3:34 PM
    • 376 Posts
    • 157 Thanks
    swindiff
    I pay 25% into MY DC Scheme and my employer pays 1%

    But they do pay 18% into my DB Scheme compared to my 8%
    • Thrugelmir
    • By Thrugelmir 10th Aug 18, 3:56 PM
    • 61,269 Posts
    • 54,505 Thanks
    Thrugelmir
    Currently if I pay 5% the company pays in 10% rising to 12% after 15 years contributions and 14% after 25 years.
    Originally posted by si2winit
    What's the likelihood of being in the same employment?
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • JoeCrystal
    • By JoeCrystal 10th Aug 18, 4:30 PM
    • 1,487 Posts
    • 940 Thanks
    JoeCrystal
    My employer contribute only 3% into my workplace pension pot (without salary sacrifice) which is clearly insufficient (I decide to contribute minimum 3% since I got tax relief issues with it). Overall, I personally contribute 13% into my private pension with overall goal of 25% of my salary throughout the year (via making single lump payment). It does really hurts to contribute that much but that is the price of aiming to get a good retirement!

    I much rather see matched contribution up to 12.5% by my employer instead.
    Last edited by JoeCrystal; 10-08-2018 at 4:39 PM.
    • choccielover
    • By choccielover 10th Aug 18, 5:41 PM
    • 393 Posts
    • 1,357 Thanks
    choccielover
    Old scheme 5 if employee paid 3 but close about 3 years ago and now only auto enrolment scheme so 3 to employees 2

    First one was sal sacrifice but no saving was passed on.

    Some of these company contributions are fantastic!!
    • JoeEngland
    • By JoeEngland 10th Aug 18, 8:10 PM
    • 180 Posts
    • 268 Thanks
    JoeEngland
    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
    Originally posted by si2winit
    One of my previous employers paid somewhere between 8% and 10% IIRC with an employee contribution of 4% which could be increased. I thought that was quite good, and my current employer will match contributions up to 10% so I pay that giving 20% in total. Basically any employer contribution is free money.
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