News:

Welcome to V.L.H

Main Menu
Welcome to verylittlehelps. Please login or sign up.

04-02-23, 06:19PM

Login with username, password and session length
Members
  • Total Members: 5,354
  • Latest: A543654
Stats
  • Total Posts: 33,210
  • Total Topics: 600
  • Online today: 112
  • Online ever: 1,040
  • (15-01-23, 06:06PM)
Users Online

Old pension scheme

Started by yeetus, 02-01-23, 12:40AM

Previous topic - Next topic

yeetus

Hi,

Just out of interest, when the career average DB scheme closed in 2015 - what were the contributions for both employee and employer at the time?


Nightworker

Your contribution was 5% and tesco put in 10%
So a total of 15%

yeetus

Great pension scheme.
Although I'm not surprised it ran up such a huge deficit on 15% contributions.

It's a real shame they'll most likely never even think of bringing it back, even with maybe a higher 7.5% contribution.

NightAndDay

Tesco does match your contribution up to 7.5%, though not as good as it used to be, it is still pretty good in comparison to other places, not as good as Civil Service Pensions or some very competitive pension schemes in professional industries, but still very good overall.


brucie

new pension scheme is rubbish compared to the old one. new one is basically a savings plan that you rely on stock markets ups and downs and at the end you have to buy a pension on open market. no guarantees at all.

Sewingbee

Quote from: NightAndDay on 03-01-23, 10:39AMTesco does match your contribution up to 7.5%, though not as good as it used to be, it is still pretty good in comparison to other places, not as good as Civil Service Pensions or some very competitive pension schemes in professional industries, but still very good overall.



In your opinion, would it be much more beneficial to transfer both the old and new Tesco pension schemes to a current employer's pension scheme, such as the Civil Service one?
Don't believe it's not greener on the other side. 😉

NightAndDay

#6
No, because generally you lose any contributions your ex-employer put in to your workplace pension scheme that you had with them if you transfer it out.

Also it's better to have multiple investment experts running your various pension funds, though they'd have similar strategies (assuming you've not chosen a risk profile) they do vary in which low/conservative risk fund they put your money in to, it's a good way to diversify out risk.

Dougall

NightAndDay I must admit now I am starting to find your posts beneficial to the topics discussed and more balanced,as opposed to the previous rhetoric about wanting Tesco to fail. This is not a dig at all and more intended to complement your posts as I can see now by you working for the company again in a different position you have adopted a different perspective 👍

NightAndDay

Thank you Dougall, I do generally want what's best for the hard workers on the shop floor and the low paid, I still have my concerns about store operations and can only hope the pay, people and safety side of it has improved from when I was working in that area, as nice and refreshing as it is to work in an environment in which you are treated with respect and dignity and are well compensated, I don't like how many office staff have never worked on the shop floor and are oblivious to the sort of things that go on there. It really is a drastic difference between both work environments and I really do empathize with those who've had a bad run if it on the shop floor side.

NightAndDay

Quote from: brucie on 05-01-23, 11:54AMnew pension scheme is rubbish compared to the old one. new one is basically a savings plan that you rely on stock markets ups and downs and at the end you have to buy a pension on open market. no guarantees at all.

Though not as good as the old one, it is from what I've seen still the best in Retail, certainly better than the competition, as much as I tend to criticize Tescos compensation package overall, the pension scheme is actually good.

Also the vast majority of pension schemes work like that, the worst case scenario if your pension goes to zero, the government has a pension protection fund that will recover all if not the majority of your pension, if you do nothing, your pension is managed by investment experts employed by the likes of Legal and General and Experis, you get charged an admin fee every month (a token fee usually proportional to your contribution) and they invest in a fund, depending on many factors, these could be conservative moderate risk funds such as a global equity fund, which will be typical if you're at a young age and the macroeconomy is doing well or a low risk growth fund which is more typical when you're getting on (typically 15+ years of contributing) and the macroeconomy is in a state like it is now where interest rates are increasing, all of these "funds" are a collection of assets and investments, the lower risk ones will have things like bonds and low risk investments, funds like the global equity fund would be a diversified collection of conservative-medium risk investments.

Over the long term, the trend for your funds are more likely to go up than it is down, and when it does go down, it usually isn't for very long.

Attilla

"Experts". Come on take a look at your scheme I bet it lost lads last year, mine creatively did.  As for best in retail. It's the same as all the rest. The Union sold us down the river when they let Tesco close the scheme.

NightAndDay

Mines dropped but is still up overall, the main Retailers pension schemes aren't as good as Tescos current one.

forrestgimp

Quote from: Attilla on 09-01-23, 09:46AM"Experts". Come on take a look at your scheme I bet it lost lads last year, mine creatively did.  As for best in retail. It's the same as all the rest. The Union sold us down the river when they let Tesco close the scheme.

Out of interest what do you suppose the union could have done to stop them?

barafear

#13
Absolutely nothing that could be done. Virtually all private pension schemes had their final salary/defined benefit schemes closed because in effect they have become increasingly unaffordable as people's life expectancy has increased.

The current scheme - defined contribution - i.e. the amount contributed by the employee and the employer is "fixed" (defined) - albeit it tends to be "a % of salary" (so not quite fixed but sort of)

The entire risk of a DC scheme is on the employee - whereas a defined benefit (e.g. when you retire after 30 years we promise you a pension of £15k a year) the risk is on the supplier/employer.

Is Tesco's scheme "more generous than others" ?

I don't know the details of others - so cannot comment.

By law, Tesco have to contribute at least 3% to our scheme - so the fact that they can contribute 7.5% (assuming we do too) is a little bit above and beyond the absolute minimum.


But in terms of how much pension will we have when we retire - this depends on the performance of our "funds" being invested - but clearly having any sort of employer contribution helps "bump it up" - plus the added benefit that we get tax relief on our contributions (assuming you earn enough to pay tax!)

Quick Google search brought this up:

How much do Sainsburys pay into pension?
When you choose to pay more, these are called 'Step Up' contributions. You pay 4%, 5%, 6%, 7%, 7.5% or more of your Step Up pensionable pay and Sainsbury's will pay in the same amount up to a maximum of 7.5%.

So - Tesco are no more generous than Sainsbury

NightAndDay

#14
Tesco did have the best pension scheme back when it was 5% and 10%, even with the transition to matching up to 7.5%, Sainsbury's, Morrisons and the rest were well behind, this step up pension Sainsbury's is doing must be relatively recent, I remember when it was 3.5% that they'd match.

I do know the discounters pension schemes aren't great. Times have changed, but I still stand by my statement, even Tescos current pension scheme is good compared to many employers, even outside of Retail.

londoner83

The thing people tend to forget with pensions is the sooner you start paying in the bigger your funds will be when you retire. Even if you pay in the bare minimum as a 25 year old you are still saving towards a pot you will need in 40+ years time. Whereas when people actually start thinking about retirement in their 50's and 60's it's often too late to build up a sizeable pot.

If you ever leave Tesco you can either freeze your pension or transfer it to your new employer.

NightAndDay

#16
I left Tesco and came back and it's still made money when I left for 3 years and didn't contribute anything, it's often the case not worth transferring your pension and leaving it untouched as many schemes result in the loss of employer contributions if transferred out.

Pensions are a long term investment and unless society collapses, it will in every likelihood be more than what you and your employer has put in.

I wouldn't advise freezing your pension, inflation will eat away at it's value.


SMF spam blocked by CleanTalk