Pensions+ FAQ

1. What elements of my pay will be ta ken through Pensions+?

Pensions+ is an arrangement that reduces National Insurance (NI) contributions for both employees and employers. The arrangement is acceptable to His Majesty's Revenue & Customs (HMRC) and it allows for your take-home pay to be optimised without affecting the amount of contributions or pension benefits payable.

2. What elements of my pay will be taken through Pensions+?

This is defined as Pensionable Salary and will be specified in the Rules that govern your particular pension scheme. If you wish to check an element, please contact the Payroll Team or Pensions Team.

3. What if I am not eligible to participate in Pensions+?

If you are not eligible to participate in Pensions+ due to the level of pay, you will be automatically opted out. Please note that you would still pay pension scheme contributions and these would then be treated as employee contributions.

4. Does Pensions+ affect any salary-related benefits?

No. Your gross contractual salary before the reduction for Pensions+ will still be used to calculate all employee benefit entitlements (such as pay increases, overtime, your death-in-service benefits etc). Your salary before Pensions+ is applied is known as your Reference Salary.

5. What do I need to do to arrange for my contributions to be paid through Pensions+?

You don't need to do anything. You will automatically be put into the arrangement based on the terms and conditions in your contract.

6. Can I opt out of the Pensions+ arrangement?

If you wish to opt out of Pensions+, please complete the following Pensions+ opt out form and send it to the Payroll Team. Please note by opting out of Pensions+, you would still be a member of your pension scheme and your contributions would then be treated as employee contributions. However, you would no longer benefit from NI relief. If you are seeking to leave the pension scheme altogether, please contact the Pensions Office for further information.

7. Will the University still pay its own contribution under the Pensions+ arrangement?

Yes. The University will continue to make the normal employer contribution to your scheme based on your Reference Salary (see Q4 above for definition).

8. Will I still benefit from income tax relief under the Pensions+ arrangement?

Yes, you still receive income tax relief.

9. What happens if the pension contribution rate changes for my scheme?

If this were to occur, you would be notified of any changes to the pension scheme or Pensions+ in writing.

10. Can I pay additional voluntary contributions (AVCs) via salary sacrifice?

No, but there is one exception for USS members. USS members can contribute to a 1% AVC arrangement known as ‘the Match’ which can be taken via salary sacrifice. More information on ‘the Match’ can be found on USS’s website . All other forms of AVC payment will not be taken via salary sacrifice but they will still receive income tax relief.

11. What happens to Pensions+ if I go on maternity leave, parental leave or long-term sick leave?

As this can be unique to the individual’s circumstances, it is recommended to contact the Payroll Team directly who will provide you with full details. Please find their contact details in the right-hand panel. For further details on the wider effect of salary sacrifice on payments and benefits, please visit the following Government webpage.

12. Will my State pension benefits be reduced if I contribute through Pensions+?

No, your Basic State Pension entitlement will not be affected as you will still pay National Insurance on the amount not taken through Pensions+. If your salary decreases to a level below the Lower Earnings Limit or the National Minimum Wage, you will no longer be eligible to contribute to Pensions+. In such a scenario, you will be automatically opted out. This measure is in place to ensure that your entitlement to the Basic State Pension remains unaffected.

13. As my contractual salary is reduced as a result of Pensions+, would this affect the amount of mortgage or loan I could receive?

No, it shouldn't have any impact. Reference letters provided by the University for mortgage or loan purposes will refer to your Reference Salary (see Q4 for definition). If you have any concerns in this area, you are strongly recommended to speak to your lender to confirm their view.

14. What happens to my Death-in-Service Benefits (including Life Assurance, Dependants' Pension and other benefits)?

None of your Death-in-Service Benefits (including Life Assurance, Dependants' Pension and other benefits) will be affected by participating in Pensions+.

15. Does contributing through Pensions+ affect my student loan repayments as they are based on my earnings?

Yes. The amount you are required to pay in student loans will be lower as repayment calculations are based on your pay after the Pensions+ reduction. If you pay off your loan at a lower rate, you will end up paying it back over a longer period.

16. I am over State Pension Age (SPA) so do not pay NI. Will I be included in Pensions+?

Yes. Pensions+ is designed to create a NI saving for both employees and the employer. However, as you are over State Pension Age, you are not required to pay NI anyway, so have no NI to "save". Whilst you have nothing to gain by participating in Pensions+, it has no negative impact on your entitlements from either the University or from the State, and the University will still be able to save on their NI contributions.

17. What will happen if I leave?

Information on what happens when you leave can be found on the following internal web pages:

For USS members more information about the implications of salary sacrifice arrangements and leaving the scheme can be found on USS’s refunds page.

18. What if I have any further questions?

Please contact either the Pensions Office or the Payroll Team.