How old are the vice chancellors? Just a little follow-up to my note on the university super scheme. My “normally reliable source” asks me to note that the 14% employer contribution for all under the scheme equals 11.9% after 15% contributions tax. The member puts in 7% after tax. A total of 18.9% at all ages.
But up to age 40, the benefit only accrues at 18% of Final average Salary which is less than current salary. Only at age 45 is the benefit accrual rate of 19% higher than the contribution rate. In short, 20 year’s service from age 20 to 40 gives a benefit of 3.6 times final average salary. This is despite fact about 3.8 times salary has been put in over this period no return. At age 65 benefit accrues at 23% of final average salary. Twenty year’s service from 45 to 65 gives 4.6 times final average salary. How can this be considered a fair scheme.