Construction Pension Scheme - is it any use?

H

Hoagy

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Can anyone tell me how the construction industry pension scheme compares to other pension schemes? The basics are:
It’s compulsory for everyone in the industry, transferable between employers
It’s based on a weekly pension stamp of € 51.27 (€29.78 ER,€21.49EE)
There’s a sick pay element (€34.38/day), there’s a death benefit (€63.5K plus your fund)
As far as I know the maximum level of pension at present is about €4K per annum.
That seems to me to be woefully inadequate.
For example, the hourly rate for electricians is €21.49, an annual basic salary of €43582,
So the pension contribution element of the total (€44.60) is just over 5% of income.

In my own case I have contributions from 1970 till 1991. When I inquired I was told I
will get a pension of €500 per annum. Can’t wait.
It’s an ongoing cause of trouble - many employers in our trade don’t join the scheme, mostly with the agreement of their workers. So much so that there is an organisation called [broken link removed] which exists to try and force compliance.
At the minute there are thousands of foreign workers employed in construction. They are all contributing to a scheme that probably none of them will ever benefit from.

It seems to me that if the scheme wasn’t the only one on offer they would have to improve the benefits.
 
My primary criticism of the CWPS is that contributions are standardised for all members. In other words, whether you're earning €20,000 or €200,000, your contribution rate is the same.

It's also obligatory for all construction industry employers to sign up for this scheme, whether or not they want to. A construction industry employer, for example, cannot simply put a PRSA scheme in place for their employees, like most others. This seems anti-competitive to me.

I'd recommend that if you can afford to, you consider making Additional Voluntary Contributions (AVCs) to boost your pension benefits, either through the CWPS AVC arrangement or through an AVC PRSA of your own choosing.
 
LDFerguson said:
It's also obligatory for all construction industry employers to sign up for this scheme, whether or not they want to. A construction industry employer, for example, cannot simply put a PRSA scheme in place for their employees, like most others. This seems anti-competitive to me.
Click to expand...

As I understand it, they can BUT they would have to show that the benefits from the PRSA at least match or exceed the benefits under the CWPS and nobody wants to make such a guarantee.
 
Yes - there are several reasons why it is practically impossible for an employer to be able to guarantee that the benefits provided under an alternative arrangement are equal to those provided by the CWPS, not least of which is the fact that the risk benefits would be difficult for a small employer to source. So why don't the CIF de-couple the pension scheme and the risk benefits? Flat rate contribution levels irrespective of salary is madness in my opinion.
 
then you have the employers deducting the employees contributions and not paying them into the pension scheme !.
 
That should not overly concern the employee - but in the long run it may make the scheme (even more!) insolvent.

The employee's pension is defined, so whether or not his/her contribution goes in should not - in theory - affect his/her pension.
 
But if an employer is breaking the law in this manner, it should raise certain questions in an employee's mind about what other corners s/he's cutting.
 
Well I think we can leave that philosophy and psychology debate for shooting the breeze!
 
MMilken said:
Well I think we can leave that philosophy and psychology debate for shooting the breeze!
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If an employer is deducting contributions from an employee's salary and not passing them on to the scheme, it's illegal. I can't see any scope for psychological or philisophical debate on that one.
 
  1. The OP did not suggest that this was happening
  2. It is a DB Scheme so such happenings should not affect the member's pension
 
MMilken said:
  1. The OP did not suggest that this was happening
  2. It is a DB Scheme so such happenings should not affect the member's pension
Click to expand...

I was just trying to find out how the scheme compares to other pensions.

In fact your second point isn't quite correct. The final pension amount depends on the number of weekly stamps credited to the member's account, so if an employer fails to stamp a card and isn't caught, the member's pension will be reduced. You have to remember that guys might work for several different employers during a year.
 
MMilken said:
  1. The OP did not suggest that this was happening
  2. It is a DB Scheme so such happenings should not affect the member's pension
Click to expand...

  1. Coolhandluke started referred to the practice later in the thread.
  2. You already made that point yesterday.
 
  • I did not know this was an "Is my employer possibly doing bad things?" forum, I thought it was a "Pensions" forum.
 
It's a forum in which it is quite appropriate to discuss illegal practices by employers that can have an effect on people's pensions.
 
Its impossible to discuss the CIF scheme in any meaningful way without taking into account the large rate of non-compliance with the scheme and the utter disrespect in which the scheme is held by equally large numbers of employers and employees alike.
 
Absolutely ubiq, the focus is on the pension scheme.

Opinions like "Well if (s)he is doing that then I wonder what else (s)he is doing" are not relevant.
 
I think you need to read ubi's post again.

The employee's pension is defined, so whether or not his/her contribution goes in should not - in theory - affect his/her pension.
Click to expand...

I also think you should clarify that this statement is both unhelpful to the thread and also factually wrong.
 
LD it is factually correct.

Whether or not an employee contributes to a Defined Benefit Pension Scheme should not - in theory - affect his/her pension at retirement.

I presume you know how a DB Plan operates.
 
Your mistake is that you are confusing the CIF scheme with a typical DB scheme. In a DB scheme, your statement would be correct. In the CIF arrangement, a member's benefits will be affected if their employer has failed to pass on contributions.

In the context of this thread, your statement is wrong.
 
Your mistake seems to be in understanding my statement.

It's also obligatory for all construction industry employers to sign up for this scheme, whether or not they want to.

The statement (in bold, above) of yours was wrong, but I got over it.
 
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