PENSION PLANS: the good the bad and the uglyThe dangerously neglected issue of company pension schemes hit the branch agenda in January after our very own TUC Pension Champion reported on a course he had attended in London The dangerously neglected issue of company pension schemes hit the branch agenda in January after our very own TUC Pension Champion reported on a course he had attended in London. The branch decided to do a survey of the schemes running in our own workplaces, which is published below. The table reveals big differences between companies in the relative contributions of employers and employee, and a general trend towards closing or diminishing the value of final salary schemes.
Final salary schemes and other ‘defined benefit’ schemes are preferable to money purchase or other ‘defined contribution’ schemes, because in the first, your level of pension is guaranteed, while in the second, your money is invested, and what you get depends on the vagaries of the market.
Please note: the information in this table is based on reports from our chapels and has not been checked. If there are any inaccuracies, please e-mail the secretary at oxnuj@aol.com. The branch would also welcome information on workplaces not reported here.
Two chapel officers from Macmillan are set to attend the TUC pensions champion course this coming week.
Pearson Education:
No final salary scheme. Money Purchase: Company contributes double whatever the employee contributes.
Employees' minimum is 2.5% of salary
Under 30s: maximum of 5% of salary; Age 30–45: maximum of 6%; Over 45: maximum of 8%. Increments rise by 0.5%.
(Over 45s given a special salary increase depending on level of contribution to compensate for loss of final salary pension with former owners Reed Elsevier: 1% increase for those who chose to contribute 6%, 2% for 7% contributions and 3% for 8% contributions).
OUP
Final salary scheme: Based on 1/80th accrual rate*. Shortfall of £31m as of 2006. Company now pays 19% (from April ’07). Employee contributions risen depending on accrual rate by between 0.25% and 0.75%. Those on 1/80ths now paying 6% (1% increase).
Money purchase: New staff pay a minimum of 3%; employer 6%. OUP will match every 1% added by employee.
New staff can choose either scheme.
Newsquest
Final salary scheme: Shortfall of some £50m. Phased increases over 4 years started in January ’08. Eventually top rate (1/60th accrual rate) – employer 12%, employee 10%; lower rate (1/80th) 8%/9%.
Money purchase: Stakeholder scheme. Employer matched funding, 1–6%.
Oxford Analytica
No final salary scheme.
Money purchase: Group stakeholder plan. Company pays 3% of salary into employees' personal pension accounts from March ’08. Employee contribution voluntary. Annual management charge is 1%, and that is the only charge. Waiting period for new employees, during which company pays no pension contributions, from 18 months to 2 years.
Elsevier
No final salary scheme.
Money purchase: From 1 April 2007, Elsevier has contributed the equivalent of 3% of salary, but will match employee contributions up to 5%.
Macmillan
Final salary scheme: closed to newcomers many years ago. Default contribution level for employee is 5%, for company, 6%.
Money purchase scheme: also closed to newcomers. Employee contributes 3% or 5%. For those contributing 3%, the company pays between 4% and 10% depending on length of service. For those contributing 5% the company pays between 6% and 15%.
Personal pension plan: The only option for newcomers. Employee contributes 1.5% or 3.5%. For those contributing 1.5%, the company pays between 3.5% and 9.5% depending on length of service. For those contributing 3.5% the company pays between 5.5% and 14.5%.
For both money purchase and personal pension plan, the lowest company contribution applies for the first 10 years employment. the highest kicks in after 30 years.
T&F
Final salary scheme at T&F books (formerly Routledge) was lost when the operation moved from London to Didcot.
Money purchase scheme -- details not currently available
BBC
Final salary scheme: employees pay in 6%, BBC pays in 19.1%
Career average scheme: employees pay in 4%, BBC pays in 19.1%
ITV
Defined benefit scheme: employees pay in 7% and the company pays in around 13%
* To calculate the value of your final pension at a 1/80th accrual rate you multiply your final salary by the number of years worked and divide it by 80 AW 2008-03-03
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