Mandatory Ponzi scheme enrolment

I'm in an NHS pension scheme, I pay 12.3% plus an additional 3.59% per month and they don't make any contribution... Kinda sucks, as when the scheme started I pay 5.5-6% earnings dependant.
They changed the figures along the way, but the benefit to me at the end hasn't changed a single bit.
 
The way our economy is, you'd be mad not to start a pension.

remember, whatever % you put into your pension, your employer matches!
 
I don't know what to be more shocked about, the fact groen didn't know you could opt out or that he's found someone who would employ him.

ON topic though I was enrolled in the Local Government pension scheme which works out to be around 7% of my wages. I've opted out for a few months as I get my debts paid off but I will be re-joining at the end of the year. In my case my employer is willing to put in £3 in for every £1 I do so definitely worth it (and you can retire at 60 if you want to).

However to kind of back groen up, opting out isn't a one off thing. I've been told I will have to opt out again next month as every September they automatically re-enroll anyone who isn't. I do think that is a little forceful in liberal country.
 
Last edited:
Unless you're exceedingly fortunate to have been enrolled into a DB scheme, where the incomes from a lower tier is used to support the outgoings for higher tiers, then your pension scheme is in no way like a Ponzi. Most workplace pensions will now be DC schemes so you will accrue a pot of money through contributions which will grow through investments. Upon retirement you will use this pension pot to purchase a pension. So it's not a pyramid (Ponzi) scheme but a savings and investment scheme with tax breaks and matched contributions.

Oh and 1%?? Your employer is a tightwad! I'm guessing that's the minimum they can get away with.
 
Hikari Kisugi said:
I'm in an NHS pension scheme, I pay 12.3% plus an additional 3.59% per month and they don't make any contribution... Kinda sucks, as when the scheme started I pay 5.5-6% earnings dependant.
They changed the figures along the way, but the benefit to me at the end hasn't changed a single bit.
Click to expand...

The NHS Pension Scheme has 14% of your pensionable salary paid by your NHS Employer.

To be eligible to join the NHS Pension Scheme you need to be between the ages of 16 and 75 and you must be directly employed by the NHS.
Upon joining the NHS Pension Scheme you should be issued with a Scheme Guide by your employer. Pension contributions will automatically be deducted from your salary and these will be shown on your payslip.
Your benefits as a Scheme member include (subject to Scheme eligibility):
NHS Pension benefits are fully guaranteed by Government
In addition to your member contributions, your NHS employer also contributes the equivalent of 14% of your pensionable pay towards your Scheme benefits
The contributions paid are based on your pay before tax, therefore you receive tax relief on the contributions paid
The annual pension is payable for life and is increased each year in line with Consumer Pricing Index (CPI)
Tax free lump sum upon retirement for member’s of the 1995 Section
The option to give up part of your pension in order to claim a bigger lump sum in the 1995 Section
Members of the 2008 Section have the option of giving up part of their pension to receive a lump sum
Death in service life assurance lump sum
Pension benefits payable to dependants including children
Ill health retirement benefits
Option to buy additional pension
Option to transfer previous pension benefits into the Scheme
Click to expand...

http://www.nhsbsa.nhs.uk/Pensions/About.aspx

It is effective,y a "final salary" or "average career earnings" pension, so what contributions your NHS employer makes are irrelevant to you as your pension is guaranteed regardless and is not based on your contributions like a Money Purchase Plan Pension would be. Also the benefit did increase (depending on your circumstances) when the plan changed in 2008 and contributions increased depending on your level of earnings.

http://www.nhsbsa.nhs.uk/Documents/Pensions/SD_guide_-_Online_(V10)_04.2013.pdf

The NHS pension is a very good pension, particularly compared to most others. I wouldn't be complaining about it.
 
Last edited:
matt_fsr said:
Damn straight. Wait, was there a groen thread where it wasn't? :confused:



If you don't like it, why are you still here? Surely there's better countries with tax regimes you could live under? With better living conditions? Friendlier neighbouring countries?
Click to expand...

Err...Scotland? :)
 
Castiel said:
The NHS Pension Scheme has 14% of your pensionable salary paid by your NHS Employer.
It is effective,y a "final salary" or "average career earnings" pension, so what contributions your NHS employer makes are irrelevant to you as your pension is guaranteed regardless and is not based on your contributions like a Money Purchase Plan Pension would be.
The NHS pension is a very good pension, particularly compared to most others. I wouldn't be complaining about it.
Click to expand...

We are different.
There is no contribution.
We are an average salary scheme and always have been. For each year you work, they take 1/80 of 43% of yout gross earning and add that figure to the pot.
When you work fourty years you then have what they class as full average salary pension.
They do not physically ever contribute anything, and my pension cost has more than doubled in the past ten years, for absolutely no change in the average salary nature, or the end result of what it will be worth to me at the end.
 
From my understanding, you are auto-enrolled into this scheme every year, and have to opt-out each year if you wish to.

Personally, I would prefer not to be told what to do with my money, and have more choice of where it's invested etc.
I've decided to opt-out until 2017, as the percentages are a lot more attractive. At the moment it's 1%/1%, which on my wages is tiny.
 
janp said:
From my understanding, you are auto-enrolled into this scheme every year, and have to opt-out each year if you wish to.
Click to expand...

Yes I have found this out as stated above. I think the automatic opt in is a good thing because a lot of us are lazy but I disagree with the yearly auto-opt in.

It should be auto opt-in, then if you leave the scheme at most you get a letter every year encouraging you to opt back in, they shouldn't just do it.
 
Hikari Kisugi said:
We are different.
There is no contribution.
We are an average salary scheme and always have been. For each year you work, they take 1/80 of 43% of yout gross earning and add that figure to the pot.
When you work fourty years you then have what they class as full average salary pension.
They do not physically ever contribute anything, and my pension cost has more than doubled in the past ten years, for absolutely no change in the average salary nature, or the end result of what it will be worth to me at the end.
Click to expand...

The fact that you have an average career pension means they fund a significant portion of it by default. As the links show, if you are on the NHS Pension Scheme as you say you are (I assume as an a Provider or Performer if you are a dentist and not employed by the GDS/PDS as a limited company contractor and are eligible for the NHSPS scheme?) then your NHS employer does contribute to your pension. The second link explains the various pension methodologies depending on which scheme you are in (post 2008 or not) and your earnings..(I assume from your contribution level that you are high up on that earnings table)

You may not think the NHS contribute, but the very nature of the two schemes means they have to as your contributions would not cover either section of the pension you receive (The trustees estimate this is the equivalent of 14% of the individuals pensionable earnings on average)...you are not on a money purchase plan, which the majority of company pensions are these days where the pension you receive is entirely dependant upon contributions.

Your pension, while you may be making higher contributions, is still one of the best in the country, is based on your Career Earnings not your contributions and is guaranteed by the Government....you are in a very good position regarding your pension despite your increased contributions and understandable annoyance at having to pay them.

http://www.nhsbsa.nhs.uk/Documents/Pensions/GDP_Pensions_Guide_(V1)_09.2011.pdf

http://www.nhsbsa.nhs.uk/Documents/Pensions/GDP_Pensions_Guide_(V2)_12.2012.pdf

Employer contributions are based on 14% of NHS pensionable pay. Employee contributions in 2012/13 range from 5% to 10.9% and from 5% to 13.3% in pensions year 2013/14.[...] Employer contributions are based on a fixed 14% rate and are collected off the commissioning PCT/LHB/NHSCB by Dental Services every month. Once the ARR is completed Dental Services will collect any arrears from the PCT/LHB/NHSCB or repay overpaid contributions.
Click to expand...
 
Last edited:
Heyyyy, sit on it ! (I thought someone said Fonzi)

Seriously, do you actually consider what you write Groen ? Fellow OC'ers have pointed out to you that scheme is to enforce every working individual is provided with a pension therefore the next generation of tax payers are not paying for bad planning.
 
You must log in or register to reply here.
Back
Top Bottom