There’s more to working life than just your pension scheme! The pension scheme is just part of a wider package of goodies that come under the general heading of ‘employee benefits’. Here we give a simple guide to the issues affecting employee benefits, and the questions to ask a prospective employer.
Is the pension scheme in your company a ‘final salary scheme’ or a ‘group personal pension scheme’?
The first gives you a pension equal to a percentage of your final salary and usually relates to your length of service with the company. The second invests your pension savings in funds, but gives no guarantee of the pension you will receive at the end.
What percentage of my salary will my employer contribute and what will I contribute?
While there is no legal obligation on an employer to contribute to your salary, most do. A typical package might involve your employer paying in the equivalent of 3% of your salary, while you pay twice that.
Does the company provide any life cover and if so, how much?
A group life policy will pay a multiple of your annual salary in the event of your ‘death in service’. Depending on the scheme, these will typically pay out two to four times your annual salary.
What other benefits are included in my package?
These might include private medical insurance, income protection cover, in addition to the aforementioned ‘death in service’ benefit. With this type of group insurance, up to a certain limit of cover, often no medical evidence is required. The insurer calculates that the health of a group averages out better than the health of one individual. To qualify for this advantage in a group scheme, you normally must have demonstrated good health by being at work for the previous two months.
