Good day, my employer 'makes' a contribution on my behalf to the in-house retirement fund of 7.5% plus another 4.5% (ouch) for disability and death cover. They then make a contribution of 7.5% from my 'pensionable salary' before tax which is 'my' contribution. This is acording to the fund rules, but it's actually all 'my' salary as the company has a cost to company model.
1. I pay a fringe benefit tax on my employer's contribution. As my salary is Cost to Company it seems rediculous that my company must pay a contribution on my behalf which is then subject to fringe benefit taxation. Yes this is according to the fund rules but these rules can be changed. Is my understanding, as outlined above, correct that this practice is not in my best interests and the trustees are falling down on their responsibility to their members? Please could suitably knowledgeable forum members comment/advise.
2. PMy employer does not seem to get it that there is no longer such a concept such as 'pensionable salary' from a taxation point of view and do not seem to care about or want to acknowledge the retirement tax reforms. Please comment.
I believe that for the tax implications alone I could do a better job investing for my retirement myself in an RA, investing a healthy 27.5% tax free, but the company has made membership of their fund compulsory. I do already contribute the difference between 27.5% and my contributions to the company to an RA.