Company Pensions

[Jamesx81x]

Hi guys

 

Bit of a tricky one so not sure how many people will have knowledge on it but will try to be as clear as i can.

 

Person A has a total of 2.7% deducted from his monthly salary towards his pension contributions on one pension scheme

 

Person B has a total of 4.7% deducted from his monthly salary on a new pension scheme

 

Person B has no choice but to pay 4.7% as Person A's scheme is no longer available.

 

This then leaves Person B having an extra 2% deducted from his pay therefore in essence earns 2% less than his equal counterpart.

 

Is the fact that there is no option for people on the new scheme to pay the same as those on the old scheme discriminating and against equal opportunities?

 

Is it also not fair that an employee should not be expected to pay more than others of equal standing within a company?

 

Thanks for any advice.

[Gaston Grimsdyke]

Maybe the benefits on the new scheme are better than the old scheme so person B benefits from the higher deductions by having a more valuable pension pot?

[Jamesx81x]

Thats the thing there are no better benefits neither is it a more valuable pot.

 

Instead of moving those on the old scheme on to the new scheme making everyone equal they have created a 2 tier workforce where on person pays more than the other

[Ganymede]

 

Instead of moving those on the old scheme on to the new scheme making everyone equal they have created a 2 tier workforce where on person pays more than the other

 

 

C'est la vie.

[DuffNCustard]

As long as there is no discrimination based on gender, religious belief or sexual orientation, I think that the trustees of a pension scheme are quite within their rights to do this. In my company pension scheme new starters have a completely different set of benefits, whilst the t's and c's for existing members have been moderately changed.

[assisted blonde]

As long as the pension scheme is voluntary I cant see a problem, new starters can elect to either join on the new rates or not.

My company also has some people working on an old contract with different benefits from those on new contracts.

[Old Cogger]

Most Company pension schemes are doing this now, previous members have contract, new members have the latest version, there has been too many shortfalls in schemes which have nearly gone to the wall in the past, so if you want company pension then you have to go along with it, you could take out your own, but stick with the company scheme you are likely to be a lot better off, my mistake, and do not forget the tax situation still stands after you retire, they take tax off pensions over your allowance.

Edited June 18, 2012 by Old Cogger

[Jamesx81x]

Thanks for the replies guys

 

So we have established that it looks like a fairly common practice for companies to do this.

 

What about then if the company is taking 9% of your annual wage at source which is for (they state) pension purposes and you are also placed onto the new pension scheme when you join unless you opt out.

 

Bearing in mind the 9% abatement does not return anything for you. If you were to leave the new pension scheme you wouldn't receive a penny yet would still be paying the 9%.

 

In effect are paying into 2 pensions but only receive benefits from one.

 

Where is the legalities in that?

 

Thanks guys

[Ganymede]

You need to speak to an independant financial advisor.