Our defined contribution (DC) section
The Schroders Retirement Benefits Scheme (the Scheme) is one of the most valuable benefits that Schroders provides to its employees. The Scheme is set up under a trust, which means it’s managed by a separate trust company, Schroder Pension Trustee Limited (the Trustee). The Trustee is responsible for the security of members' interests and employs professional advisers to assist in the smooth running of the Scheme. You can read more about the Trustee and learn what they do on their dedicated page.
The Scheme is governed by a set of Trust Deed and Rules that set out how the Scheme is run. Mercer carries out the day-to-day administration of the DC section.
Your DC section explained
All eligible employees automatically join the DC section when they join Schroders, which means they have an individual account set up. The money that Schroders and you pay in is invested in your individual account - the DC section offers a number of investment options. When you’re ready to retire, you can use the money you’ve built up to provide your retirement income.
If you’d prefer to opt out of the DC section, please contact the Pensions Team.
Paying into the DC section
The contribution structure you can benefit from as a member of the DC section depends on when your contract of employment was issued.
Contract of employment issued by Schroders on or after 1 February 2024
Schroders pays | You pay | Schroders matching | Total contribution |
8% | 5% or more | 5% | 18% or more |
8% | 4% | 4% | 16% |
8% | 3% | 3% | 14% |
8% | 2% | 2% | 12% |
8% | 1% | 1% | 10% |
8% | 0% | 0% | 8% |
You will join paying a 5% contribution, with means Schroders will pay in 13%, giving a total contribution into the DC section of 18%. You can change how much you pay in, either up or down, in Options, which is the Schroders benefits system. Any contributions you make are paid using salary sacrifice.
Contract of employment issued by Schroders before 1 February 2024
Schroders pays | You pay | Schroders matching | Total contribution |
16% | 2% or more | 2% | 20% or more |
16% | 1% | 1% | 18% |
16% | 0% | 0% | 16% |
You will have joined the Scheme receiving a 16% contribution at no cost to you. You can change how much you pay in, either up or down, in Options, which is Schroders benefits system. Any contributions you make are paid using salary sacrifice.
The cost to you
Any contributions you make are paid using salary sacrifice. This means making contributions yourself doesn’t cost as much as you might think, because you save on the tax and National Insurance that you would have paid.
Here’s a couple of illustrative examples of the cost to you.
Contract of employment issued by Schroders on or after 1 February 2024
You earn £50,400 a year, which is £4,200 a month. You chose to pay a 5% contribution which means Schroders will make an 13% contribution. Each month:
- You pay £210 into your individual account
- Schroders pays £546 into your individual account
Because of the salary sacrifice approach:
- You save £42 in income tax
- You save £16.8 in National Insurance contributions
This means that the actual cost to you is £151.2 a month and a total of £756 is paid into your individual account.
Contract of employment issued by Schroders before 1 February 2024
You earn £46,800 a year, which is £3,900 a month. You chose to pay a 2% contribution which means Schroders will make an 18% contribution. Each month:
- You pay £78 into your individual account
- Schroders pays £702 into your individual account
Because of the salary sacrifice approach:
- You save £15.6 in income tax
- You save £6.24 in National Insurance contributions
This means that the actual cost to you is £56.16 a month and a total of £780 is paid into your individual account.
These examples are for illustrative purposes only and are based on a 20% tax payer, so the saving would be greater for a higher rate tax payer.
Reducing your core contribution
It’s possible to reduce the core contribution which Schroders makes to your pension, but not below 3% of your base salary. This level is reviewed from time to time to ensure it’s compliant with government rules. If you reduce the core contribution level, you won’t be able to make salary sacrifice contributions or receive the matched contribution.
What you can do with your individual account
Retirement
Our Scheme targets a retirement age of 60, but this is flexible and you can choose the age at which you retire, up to your 75th birthday. You can start to draw your benefits at any time from age 55, which is the current minimum pension age set by the government. This is due to increase to age 57 from April 2028. If you’re still working at age 60, you may defer the payment of your pension benefits until your actual retirement date. All contributions will continue to be made to your individual account until you retire or leave Schroders.
When you retire, you have a few options available. You could take your individual account as cash - the first 25% would be paid tax free, and the rest would be counted as part of your regular income and taxed as such. This is subject to an overall maximum of £268,275.
Your individual account, either the full amount or the balance left if you have taken a tax free cash sum, could be used to provide you with an income in retirement:
You can choose to take a flexible monthly income (known as ‘drawdown’);
A guaranteed income for life (an annuity); or
You can also choose a combination of these options.
More detail about these options is available on the retirement options page.
Before choosing how to access your money in retirement, we recommend getting independent financial advice to understand the most suitable options for your current situation and long-term objectives. For help with this, take a look at the Guidance and advice section. Please note that you’ll need to meet the cost of this advice.
If you leave Schroders before retiring
If you leave Schroders but aren’t ready to retire, your money remains invested in your individual account. Schroders will stop paying in, and any additional contributions you make from your salary will also stop. You can choose to move your money elsewhere before you retire, which is known as a transfer. You may want to move your money to another pension arrangement you have, from a previous or new employer, or you could transfer to a personal pension or stakeholder scheme.