Is this a benefit?

A question about : Is this a benefit?

Hi there - I am going to a meeting and these new pension schemes are to be discussed and it looks like they will be sold to us as a benefit/perk. Possibly to cover over lack of pay rises etc......

In my mind it would only be a benefit if they were to contribute more than the minimum required otherwise we are the same as everyone else.

I dont no what pension type/options are out there for employers to choose from, so could someone please tell me what the minimum requirements are? From a contribution basis?

If we are being offered the absolute minimum I just want to be armed with the correct information prior to the meeting.

Thanks

Best answers:

• Thanks for that Dunstonh. So anything more than 1% at this stage would be a benefit.
  Band earnings do you mean basic pay? i.e. The employee couldnt include bonus/commission into their 1% if they wanted too?
  I know they need to start these things slowly but 1% is such a low amount for both parties to contribute when you work out the Ј.
• it's not that straightforward.
  There are several ways they can prove compliance to TPR. Band earnings is just one way of doing it and are very reflective of the NEST model.
  To be honest a GPP is the best way of investing money - not because of the long term returns - but because you get free money.
  Take the 8% example (1/10/18). Employee pays in 4% via salary sacrifice and actually saves on NI on that amount (net payment 3.5% ish).
  So the employee pays in 3.5% into something and gets an investment worth 8% immediately. I know of nothing else that provides over 100% growth immediately.
  Plus if the GPP is with someone good like Scottish life / widows / Aviva then there will be a whole host of options for investment (or should be).
  I agree, auto-enrolment is almost a complete disaster, but this Ј40bn funding gap has to be filled - they either make us pay into our own pension or they increase national insurance.
• All the arguments are fine for the young who will be saving for around 20+ years and so can start small and build up contributions.
  What about the 59 year olds like me who cannot afford to pay large sums, to get a decent pension for example of around Ј250 per month I would have to make monthly payments in the region of Ј1200 a month. It is not going to happen, however, I am having sum Ј155 of my salary taken along with a similar amount from my employer.
  This will get me a monthly pension of around Ј40 a month with a tax free lump sum around Ј5000. The number just don't stack up, I need to live around 40 years after I retire at 66, most unlikely. Why are pension such poor performing products.
  Would I not be better just putting my Ј155 into an ISA?.