15 Is it a pay cut or a pension?


Ian McGuinness, Irish Organiser, advises members in Northern Ireland to remain in their workplace pension schemes


Members north of the border will have noticed a bit of a reduction in their pay packets recently. That’s because from April this year the amount you have to contribute to your workplace pension has tripled to 3 per cent. All employees in the UK, who did not


previously have a pension provided to them by their employer, and who meet the qualification criteria, must have a Workplace Pensions scheme set up for them by the company they work for. When the Workplace Pensions scheme began, the employer paid 1 per cent into each employee’s pension plan and the employee paid 1 percent, giving a total of 2 per cent.


Since April this year the combined total that


must be paid in on each pay day is 5 per cent: 2 per cent from the employer and 3 per cent from the employee. This is due to rise to a minimum of 8 per cent in April 2019: 3 per cent from the employer and 5 per cent from the employee. Employees get tax relief related to being in a


Workplace Pension, but it will still feel as though the employee has suffered a pay cut and this feeling will probably be worse when the employee contribution goes up to 5 per cent next April. However, it should be noted that not only is


there tax relief for those in a Workplace Pensions scheme but they also get money from the employer (currently 2 per cent and next year 3 per cent of their salary) paid into their pension pot, which they would not receive if they were not in the scheme. The temptation for NUJ members may be to


pull out of the scheme, thereby not suffering the ‘cuts’ to their take home pay of 3 per cent currently and 5 per cent from next year. However, that would be robbing Peter to pay Paul and the union is advising its members not to leave their Workplace Pensions scheme


without first contacting the union to discuss the matter and without also taking independent financial advice. In recent months the NUJ has won pay rises


in a number of media organisations in the North and the first way to defend against the aforementioned perceived ‘pay cuts’, is for chapels to lodge a pay claim with their employer. The NUJ Irish Office and the two relevant branches – Belfast and District and Derry & North West – can assist in lodging such pay claims. The union can also seek, via negotiations, to increase not only salaries but other terms and conditions such as mileage and expense rates given to journalists. The NUJ can also enter negotiations with employers to see if the pension contributions can be altered. At present a minimum of 5 per cent of an employee’s gross pay must be paid into their pension pot, rising to a minimum of 8 per cent next April. Some employers, if they are not open to the idea of a pay rise, might entertain the idea of altering the contributions so that they take on more of the burden. Any cut in contribution from the employee would have to be matched by an equal increase in employer contributions. For example an employer might agree to pay 3 per cent now while the employee pays 2 per cent, which still meets the current bar of 5 per cent gross pay per employee. Negotiations to try to affect the same type of change could also be held in advance of next April’s contribution changes. The rules of the individual Workplace Pension schemes might be crucial in this regard. The message that the NUJ wants to send to


its members, is the reduction they see in their salaries is not a ‘pay cut’ but an investment in their future. It is an attempt to lessen the chances that they will live in poverty in old age, by ensuring they have a pension (or pensions) in place when they retire. Remember: don’t leave your Workplace


Pension scheme without first seeking advice from the NUJ and without also taking independent legal advice.


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