LBS pensions now paid by salary exchange
Contributions to the School’s pension arrangements will be paid via a new salary exchange arrangement from 1 June 2016 unless you elect otherwise.
What does this mean for me?
For most employees this NIC saving will result in an improvement to take home pay. The School’s NIC saving will go some way towards helping to pay for the significantly increasing costs of maintaining the pension arrangements for staff and faculty.
How does Salary Exchange work?
At present your pension contributions are deducted from your pay after National Insurance Contributions (NICs) have been paid. Under the Salary Exchange arrangement your basic salary will be reduced before NICs have been paid, by the amount you contribute to the pension. The School will make a contribution of that amount to the pension on your behalf. This will result in NIC savings for you and the School.
Participation in the Salary Exchange arrangement, resulting in a reduction to your salary for pension contribution purposes, constitutes a change to your terms and conditions of employment. However, the School will base all employee benefits on your pre-exchange salary. This will be called your ‘Reference Salary’.
What do I need to do?
If you wish to participate in Salary Exchange, you don't need to do anything. You will be automatically included, based on your current contribution level, from 1 June 2016.
To opt out and continue to contribute on the current basis, please contact me for an opt-out form and return it to Payroll by 3 June 2016.
- For further information please refer to the Salary Exchange – What you need to know guide or watch a presentation from Jon Beer of independent pension consultants Punter Southall Aspire.
- A detailed guide to Salary Exchange can also be found on Portal by navigating to: Home>Operations>Accounts>Payroll and Pensions - scroll down to 'Pension Schemes' and select 'Salary Exchange'.
- Read the latest edition of the USS newsletter