Significant increase in pension costs from work

[CareerConcerns1999]

Current pension contribution is 10%, but I've just been notified that it's being moved up to 17% next month.

They gave us three options - accept, leave the pension all together, or take an alternative which is lower but was offered last year and frankly, is a shit all round deal.

It's like they are making this existing deal so painful that people are forced to drop out of it.

Is this a "final salary" or "money purchase" arrangement? If Final Salary that'll probably be about a third of what the employer will be paying.

It's a defined benefit. 1/60th. They are matching my contribution (which they have set).

I just dont understand the significant jump without consultation.

Fucking hell that's a LOT!

I only got on board with the 10% as I got a pay rise at the same time (was previously 6%). The whole pay rise went on pension.

What’s their current contribution while you pay 10%? And what happens if you say you want to stay at 10%?

They put in 8.5 at the moment. The only option is to leave the scheme.

I'm surprised they can make that change with no consultation. Is the scheme still open to new members? It doesn't sound sustainable and it doesn't sound like the employer is contributing enough so I would ask how their contributions are calculated and if it's subject to any independent evaluation.

If there is a recognised union in place they should be fighting this with all they've got.

It’s likely that the actuary to the scheme has set the contribution percentage. The actuary is independent and does not work for the employer. They have a legal duty to set employee and employer contributions at a % that is realistic for the pensions now and in future to be met. Using realistic assumptions such as what age people born in 1960 will die, what will e inflation for next 3 years.

Ask to see the actuarial tri annual report.

@Lasvegas

It’s likely that the actuary to the scheme has set the contribution percentage. The actuary is independent and does not work for the employer. They have a legal duty to set employee and employer contributions at a % that is realistic for the pensions now and in future to be met. Using realistic assumptions such as what age people born in 1960 will die, what will e inflation for next 3 years.

Ask to see the actuarial tri annual report.

Looking at their email I do think this is what has happened. My employer is doubling their contribution so its affecting us both. It stings though.

The scheme is closed to new members.