It was (is) usual for overtime payments and bonuses not to be included as part of the final salary. However if the payment into the pension was X% of your salary then overtime/bonuses were also excluded from the contribution the worker paid in.
In a well run scheme, there shouldn't be a risk. Indeed there are schemes, originally employer based, which are in profit.
You could on perhaps most employer schemes too - albeit with a minimum. AVCs.
There will always be a risk or we would all be millionaires predicting the best investment opportunities before they occur.
Well run schemes tend be those that have changed terms over the years by either increasing contributions or reducing some benefits, especially for those who wish to retire early. Sometimes the reduction in benefits is a bit more subtle by limiting the maximum inflation linking to a small percentage. OK if inflation is low but not so good, say, if we get back to double figures.
Often the health of a scheme depends on the ratio of pensioners to those still working and paying in which is a problem for some dying industries.
Sometimes it depends on when pension regulations change and funds are forced into lower risk investments - perhaps at the wrong time when forced to sell in the market at a low - or because a government has introduced a windfall tax.
So, still a scam them. They should be based on what you elected to put into your pot.
More reasons it should depend only on your pot, and what the pension cpy thinks it can afford to pay out to you for the rest of yout life. And so on.
Quite. But I didn't bring it up.
All I'm saying is a well run company based scheme can be the equal of one from a pension provider, etc.
But I'm sure plenty here object to a company looking after its employees.
After all the only reason to provide any service at all it to make as large as possible a profit from it.
Ah - that's it, then? Freedom of choice? Makes no sense to you to for an employer having a compulsory pension scheme.
You prefer to smugly enjoy a pension you've made provision for yourself. And want the less diligent to suffer.
They still are. On the radio I heard that a 108 year old woman has received the Pfizer vaccine. She survived the Spanish Flu, decades when there was no NHS or antiobiotics and WW2 so must have an excellent natural immune system and constitution anyway.
The NHS superannuation scheme, with 1,350,000 members is totally unfunded. The taxpayer picks up the entire cost. Up to 2011 employees only paid 6% of gross pay, but now contributions are banded according to earnings. Up to £26K and employees still only pat 6%. The taxpayer effectively pays the other 12%. The employee contribution only reaches 15% on earnings above £83K, but even that requires some subsidy from the taxpayer.
There are no final-salary schemes in the private sector that are open to new employees. Gordon Brown slammed that door shut in 2001. In fact many (?most) have even stopped existing employees from taking full benefits. This is the *only* way that they can remain solvent, never mind 'in profit'. The local authority scheme was well funded before the current meltdown, but it also has a taxpayer guarantee make up any deficits anyway. Anyone who thinks it is possible to retire at 60 on half pay, fully protected against inflation after paying just 6% of gross salary for 40 years needs to go back to school and redo maths.
PS, In 2008 before the economic mayhem, the Bank of England moved its pension fund out of equities and into indexed linked gilts. How's that for insider dealing !
while the smug public servants can wangle a massive pension boost by going for promotion in the last year or two of work and then wave two fingers to the 'contract' and live for 10, 15 or 20 years longer than they were assumed to live for when they started work
40 years earlier.
If she was born in 1912, she'd have survived WW1 as well!
However if total package (salary + non-pensionable extras) = £X, and they reduce the salary component by 20% and increase the extras by a corresponding amount, you still take home £X, but now your pension is only 80% of what you thought it was going to be.
Adrian
This could be circular argument :) Many of the fat cats taking the large dividends from company profits are you and I in the form of our pension funds, and how it is invested. A £100k pension pot gives an annuity pension of £3k to £5K (depding on how it may be index linked).
These days that's exactly how most (all) private company pensions work. Long gone are the days of final salary pensions when working for a private company. Even if someone is still in a legacy scheme the benefits are likely to have eroded over the past 10 to 20 years.
If you save independently into a private "pension scheme" the same rules and taxation regulations apply! Many personal schemes (from pension savings companies) impose less risky investment opertunities the closer you get to retirement.
These days the advantage of a company scheme is that your individual pot is increased by the company paying into it and probably a much reduced administration cost.
Nothing stops a company doing that for your private pot.
I've upset someone at work.
My finger-in-the-air is that you'll work 20-60, and be retired 60-80.
So you need to put a third of your salary into your pension pot.
You can make assumptions that will change that a bit - living on half your salary in retirement is one - but it's a starting point.
Andy
Which is deducted from your salary. I told my employees, no company cars, no pension, no private healthcare. We pay you to work, what you do with your money is not our business.
The Left assumes people are too stupid to look after themselves, and wonder why intelligent working class people vote Tory.
It's complicated though.
What possible use are company cars, pensions, or private healthcare to Romanians picking cabbages in fields in Cambridgeshire ?
Anyway how well did that plan work out ?
michael adams
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