5% DC pension contribution most common for HR professionals

EXCLUSIVE: The most common pension contribution level for HR and benefit professionals who are active members of defined contribution (DC) pension schemes is 5% of their salary, according to research by Employee Benefits.

The Employee Benefits Salary survey 2014 , which questioned 361 people who are responsible for managing benefits and reward in UK organisations, found that 9% pay in 10% or more of salary. 

Under auto-enrolment legislation, current minimum contribution levels are set at 1% for employees and 1% for employers. But from 2017, contributions will gradually increase, which may be a shock for the 6% of respondents who currently pay nothing into their DC scheme.

Three-quarters (75%) of respondents are members of a DC pension scheme , with the majority (59%) being members of a group personal pension (GPP) plan , 18% members of trust-based money purchase plans, and 13% members of a stakeholder pension.

It is surprising that 5% of respondents who know they are in a DC pension do not know what type of scheme it is, given that HR and benefits professionals are expected to support their workforces through auto-enrolment with financial education and communication exercises.

Less worrying is the fact that just 2% of respondents do not know how much their employer contributes to their pension. 

Are you an active member of a defined contribution pension scheme?

Yes           75%

No            26%

Source: Those responsible for reward and benefits for staff in their own organisation (266)

Which type of defined contribution pension scheme do you belong to?

Group personal pension plan                                    59%

Trust-based money purchase plan                           18%

Stakeholder pension                                                13%

Group self-investment personal pension                   5%

Hybrid scheme                                                          1%

Do not know                                                              5%

Source: Those responsible for reward and benefits for staff in their own organisation, who are members of a defined contribution pension scheme (197)

How much does your employer contribute into your DC pension plan (as a percentage of your salary)?

Zero                                    1%

Up to 3%                             7%

4%                                      9%

5%                                     11%

6%                                     12%

7%                                      8%

8%                                     12%

9%                                      5%

10%                                    17%

11%                                    1%

12%                                    9%

13%                                    2%

14%                                    2%

15%                                    1%

More than 15%                    4%

Do not know                        2%

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Source: Those responsible for reward and benefits for staff in their own organisation, who are members of a defined contribution pension scheme (197)

Graph showing the average salary percentage paid into pension schemes by HR professionals