Is this a good deal?

[duke7779]

My employer has made me an offer on a pension plan...

• Will contribute 10% of whatever I decide to pay e.g. if I contribute €1,000 they will contribute €100
• No Policy Fee.
• No Exit Fee.
• There is a total Annual Management Charge (AMC) of 1.5% for standard funds (1% to the Insurance Company & 0.5% to xxxxx Financial Services)

Based on what I've read on this group, that appears to be the worst offer I've come across so far!

 

[vulcanlogician]

@duke7779 This pension contribution offer is so bad it almost sounds like you've misunderstood it?

 

[spinuscyn]

@vulcanlogician This... seems really bad and expressed in really weird terms..

Whereas if they were to match up to 10% then that would be very good (even taking into the high AMC)

 

[vulcanlogician]

@spinuscyn Example, my employer takes 5% of my salary and they contribute 8% additionally to a total of 13%. It's not 13% of MY salary, it's 5%. And at 5% it really only hurts me to about 3% take home, but effectively have contributed 13%. Confused?

A point for point match is considered great, e.g you do 8%, employer does 8% to match. That would be great as the hit to your take home after tax savings is only about 4-5% and pension gets 16% contributed

 

[spinuscyn]

@vulcanlogician Ya - just to clarify I was agreeing with you

 

[vulcanlogician]

@spinuscyn Same, wasnt trying to disagree with you!

 

[spinuscyn]

@vulcanlogician So just to be sure... we are agreeing?

Has this ever happened on the internet before?

 

[joseph92]

@spinuscyn Stop being so nice to each other. This is reddit. That's against the rules

 

[vasily]

@joseph92 Fuck you, nobody's being nice, this isn't reddit, and there are no rules

 

[unsure_one]

@vulcanlogician Apologies for not understanding the nuisances involved here, I'm a little confused. My company is offering the following: "The minimum contribution is 5%
of your gross pay of which the Company contributes 2.5%". Is this good?

 

[peter1000]

@vulcanlogician

is so bad it almost sounds like you've misunderstood it

That was my first thought too. It's either misunderstood or the company is trying to pull a fast one and confuse their employees into thinking they're getting a 10% match

 

[vulcanlogician]

@peter1000 10% match would be incredible though, wouldnd it? (AVC limits aside)

With 50k earnings, 5k employee, 5k employer match, that would be brilliant. In terms of total compensation I would consider this similar to 55k total comp.

10% of what someone contributes would be terrible.

With 50k earnings, 5k employee, 500 euro employer... that would be insulting. Total comp wise this could be considered 50.5k

 

[christine2756]

@vulcanlogician I get 12% matching, which is pretty whopper. 10% would be quite good but not too unusual at a big company. This "10% of what you contribute" thing would be brutal, if it's accurate

 

[vulcanlogician]

@christine2756 When's it big companies then it's TC overall. Like 40% salary, 10% bonus, 35% stock, 8% pension, then small misc things like health, dental, life insurance, the list goes on.

But at smaller companies that don't have the importance assigned to tasks like these they sometimes bump salary or stock or pension in favour of something else falling short.

My wife's company has no pension offer in Ireland, and no health either, so they offer her a stipend for health and stock in her contract, if she moved to a country that has those options offered things would change slightly (excluding getting payscaled per country anyways).

Point is TC is important to figure out in a package.

 

[christine2756]

@vulcanlogician true

 

[duke7779]

@vulcanlogician 'Insulting' is precisely the word that came to mind. Frankly I'd have been happier if they said they didn't do pensions and left it at that.

 

[peter1000]

@vulcanlogician

10% match would be incredible though, wouldnd it? (AVC limits aside)

It wouldn't be that unheard of in a number of industries

 

[nguyencuong9102]

@vulcanlogician 10% match is pretty standard at bog companies. I contribute 5% and my employer contributes 16%

 

[vulcanlogician]

@nguyencuong9102 What else does the employer offer? As that's amazing an amazing match from their side. See my comment on total comp. I think when I worked at a FAANG years ago the match was like 8 and 8, but the rest of the comp outside pension was amazing.

 

[nguyencuong9102]

@vulcanlogician Mostly just salary and bonus. 50% off insurance products, no stock. Financial industry