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Pensions and benefits presentation feb 2012
- 1. Metropolitan Salary Exchange for Pensions February 2012
- 2. Why have MHP introduced this now? • Your take home pay should increase • This will make our pension arrangement affordable and more sustainable • Other large employers participating in SHPS operate Salary Exchange
- 3. What does this presentation cover? • What is Salary Exchange for pensions • How it works • Is it right for you? • What you have to do • A reminder on Pick Your Own • To answer any questions you may have
- 4. Who is this presentation aimed at? 1. Current members of the Social Housing Pension Scheme (‘SHPS’) i.e. - The Final Salary Section - The CARE Section or - The Money Purchase Section OR 2. Any employee wishing to join the SHPS arrangement in the future
- 5. Who is this presentation NOT aimed at? • Current members of any alternative pension schemes sponsored by MHP i.e. Legacy Pension Arrangements
- 6. WHAT IS SALARY EXCHANGE?
- 7. What is Salary Exchange? • Salary Exchange is where an employee gives up their right to receive part of their cash pay in exchange for a non cash benefit – in this case pension contributions • It does not affect any other MHP benefits • Pension contributions made via Salary Exchange reduce your National Insurance Contributions • Your take home pay should increase
- 8. HOW DOES IT WORK?
- 9. How does Salary Exchange work? Net pay National Insurance Income tax Pension contribution Pre Exchange
- 10. How does Salary Exchange work? Net pay National Insurance Income tax Pension contribution Salary Exchange Pre Exchange
- 11. How does Salary Exchange work? Net pay National Insurance Income tax Pension contribution Salary Exchange Net pay National Insurance Income tax Pension contribution MHP pays Pre Exchange Post Exchange
- 12. Pension Salary Exchange – Worked Examples • Some practical examples in the Appendix • These provide you with an indication of the increase in take home pay for a range of salaries • Details of the current contribution rates applicable to each SHPS section are also shown in the notes below
- 13. Example – Final Salary, £14,000 salary Net pay National Insurance Income tax Pension contribution Salary Exchange Net pay National Insurance Income tax Pension contribution MHP pays Pre Exchange Post Exchange £121.33 £56.16 £989.18
- 14. Example – Final Salary, £14,000 salary Net pay National Insurance Income tax Pension contribution Salary Exchange Net pay National Insurance Income tax Pension contribution MHP pays Pre Exchange Post Exchange £121.33 £121.33 £56.16 £989.18 £43.54 £1,001.80
- 15. IS IT RIGHT FOR YOU?
- 16. Is it too good to be true? • Her Majesty’s Revenue and Customs approved • Operates indefinitely
- 17. Why should I bother? • It’s a more efficient way of making your pension contributions • You’ll pay less National Insurance • Your take home pay will increase • Helps the sustainability of the pension scheme in the longer term
- 18. Will it have an impact on any other statutory arrangements? - Statutory Sick Pay - Incapacity Benefit - Tax Credits - Jobseeker’s Allowance - Statutory Adoption Pay - Statutory Maternity Pay - Statutory Paternity Pay - State Pension (see next slide) - Repayment of Student Loans
- 19. Will it affect my State pension? • Your Basic State Pension will not be affected • Your State Second Pension may be affected
- 20. Will my contractual terms change? • Yes – participation in Salary Exchange constitutes a change to your terms and conditions of employment • Agreeing to a reduced base pay with corresponding increase in MHP pension contributions • This is effective from 6 April 2012
- 21. Who will not benefit from Salary Exchange? • Not all SHPS members will benefit • For example – those earning less than £12,000 per annum • MHP will contact any affected members
- 22. What if I leave MHP? Less than two years service •A Refund of Contributions is available (but not during any period you participate in SHPS via Salary Exchange) More than two years service •Retain your benefits in the Scheme or •Transfer the value of your benefits to another registered pension arrangement
- 23. WHAT DO I HAVE TO DO?
- 24. What do I have to do? • Enrolment will be automatic • To acknowledge this you need to tick the box within the Pick Your Own system • Click on Request this benefit package • Your log on details will be provided to you in the post • Your response must be submitted between 5 March and 23 March 2012
- 25. What if I do not want to join Salary Exchange for Pensions? • You can Opt-Out through Pick Your Own • This will apply to all of your SHPS contributions • You MUST log onto the Pick Your Own website and Opt-Out on pension salary exchange between 5 March and 23 March 2012
- 26. What if I do nothing? • Enrolment is automatic • You MUST acknowledge this by ticking the box and ‘Request the benefit package’ within Pick Your Own website • Your response must be submitted between 5 March and 23 March 2012
- 27. PICK YOUR OWN – A REMINDER
- 28. Pick Your Own – a reminder • Salary Exchange for pensions is important and forms part of Pick Your Own • Look out for your username and password • Pick Your Own window open 5 March to 23 March 2012
- 29. Questions? For more information please contact the reward team: – Peter Garratt on 020 3535 3924 / email peter.garratt@mht.co.uk – Ian Morgan on 020 3535 3925 / email ian.morgan@mht.co.uk
- 30. Appendix Special note for Money Purchase Section members • Change contribution rate (SHPS Money Purchase only) • Enrol into SHPS Money Purchase section
- 31. SHPS Final Salary Before salary exchange After salary exchange Annual Salary pa £14,000.00 £12,544.00 Monthly Gross Pay pm £1,166.67 £1,045.33 Employee pension contribution 10.4% pa £1,456.00 £0.00 pm £121.33 £0.00 Additional employer Pension contribution pa £0.00 £1,456.00 pm £0.00 £121.33 Employee NI pa £673.86 £522.44 pm £56.16 £43.54 Employer NI pa £699.73 £552.67 pm £58.31 £46.06 Employee take-home pay (pre income-tax) pa £11,870.14 £12,021.56 pm £989.18 £1,001.80 Employee saving per month £12.62 Employee saving per annum £151.42 Employer saving per month £12.25 Employer saving per annum £147.06
- 32. SHPS Final Salary Before salary exchange After salary exchange Annual Salary pa £25,000.00 £22,400.00 Monthly Gross Pay pm £2,083.33 £1,866.67 Employee pension contribution 10.4% pa £2,600.00 £0.00 pm £216.67 £0.00 Additional employer Pension contribution pa £0.00 £2,600.00 pm £0.00 £216.67 Employee NI pa £1,817.86 £1,547.46 pm £151.49 £128.96 Employer NI pa £1,810.73 £1,548.13 pm £150.89 £129.01 Employee take-home pay (pre income-tax) pa £20,582.14 £20,852.54 pm £1,715.18 £1,737.71 Employee saving per month £22.53 Employee saving per annum £270.40 Employer saving per month £21.88 Employer saving per annum £262.60
- 33. SHPS Final Salary Before salary exchange After salary exchange Annual Salary pa £42,000.00 £37,632.00 Monthly Gross Pay pm £3,500.00 £3,136.00 Employee pension contribution 10.4% pa £4,368.00 £0.00 pm £364.00 £0.00 Additional employer Pension contribution pa £0.00 £4,368.00 pm £0.00 £364.00 Employee NI pa £3,617.22 £3,131.59 pm £301.44 £260.97 Employer NI pa £3,600.25 £3,086.56 pm £300.02 £257.21 Employee take-home pay (pre income-tax) pa £34,014.78 £34,500.41 pm £2,834.56 £2,875.03 Employee saving per month £40.47 Employee saving per annum £485.63 Employer saving per month £42.81 Employer saving per annum £513.69
- 34. SHPS CARE Before salary exchange After salary exchange Annual Salary pa £14,000.00 £12,950.00 Monthly Gross Pay pm £1,166.67 £1,079.17 Employee pension contribution 7.5% pa £1,050.00 £0.00 pm £87.50 £0.00 Additional employer Pension contribution pa £0.00 £1,050.00 pm £0.00 £87.50 Employee NI pa £673.86 £564.66 pm £56.16 £47.06 Employer NI pa £699.73 £593.68 pm £58.31 £49.47 Employee take-home pay (pre income-tax) pa £12,276.14 £12,385.34 pm £1,023.01 £1,032.11 Employee saving per month £9.10 Employee saving per annum £109.20 Employer saving per month £8.84 Employer saving per annum £106.05
- 35. SHPS CARE Before salary Exchange After salary exchange Annual Salary pa £25,000.00 £23,125.00 Monthly Gross Pay pm £2,083.33 £1,927.08 Employee pension contribution 7.5% pa £1,875.00 £0.00 pm £156.25 £0.00 Additional employer Pension contribution pa £0.00 £1,875.00 pm £0.00 £156.25 Employee NI pa £1,817.86 £1,622.86 pm £151.49 £135.24 Employer NI pa £1,810.73 £1,621.35 pm £150.89 £135.11 Employee take-home pay (pre income-tax) pa £21,307.14 £21,502.14 pm £1,775.59 £1,791.84 Employee saving per month £16.25 Employee saving per annum £195.00 Employer saving per month £15.78 Employer saving per annum £189.38
- 36. SHPS CARE Before salary exchange After salary exchange Annual Salary pa £42,000.00 £38,850.00 Monthly Gross Pay pm £3,500.00 £3,237.50 Employee pension contribution 7.5% pa £3,150.00 £0.00 pm £262.50 £0.00 Additional employer Pension contribution pa £0.00 £3,150.00 pm £0.00 £262.50 Employee NI pa £3,617.22 £3,258.26 pm £301.44 £271.52 Employer NI pa £3,600.25 £3,209.58 pm £300.02 £267.46 Employee take-home pay (pre income-tax) pa £35,232.78 £35,591.74 pm £2,936.06 £2,965.98 Employee saving per month £29.91 Employee saving per annum £358.96 Employer saving per month £32.56 Employer saving per annum £390.67
- 37. SHPS Money Purchase (4%) Before salary exchange After salary exchange Annual Salary pa £14,000.00 £13,440.00 Monthly Gross Pay pm £1,166.67 £1,120.00 Employee pension contribution 4% pa £560.00 £0.00 pm £46.67 £0.00 Additional employer Pension contribution pa £0.00 £560.00 pm £0.00 £46.67 Employee NI pa £813.00 £745.80 pm £67.75 £62.15 Employer NI pa £956.06 £878.78 pm £79.67 £73.23 Employee take-home pay (pre income-tax) pa £12,627.00 £12,694.20 pm £1,052.25 £1,057.85 Employee saving per month £5.60 Employee saving per annum £67.20 Employer saving per month £6.44 Employer saving per annum £77.28
- 38. SHPS Money Purchase (4%) Before salary exchange After salary exchange Annual Salary pa £25,000.00 £24,000.00 Monthly Gross Pay pm £2,083.33 £2,000.00 Employee pension contribution 4% pa £1,000.00 £0.00 pm £83.33 £0.00 Additional employer Pension contribution pa £0.00 £1,000.00 pm £0.00 £83.33 Employee NI pa £2,133.00 £2,013.00 pm £177.75 £167.75 Employer NI pa £2,474.06 £2,336.06 pm £206.17 £194.67 Employee take-home pay (pre income-tax) pa £21,867.00 £21,987.00 pm £1,822.25 £1,832.25 Employee saving per month £10.00 Employee saving per annum £120.00 Employer saving per month £11.50 Employer saving per annum £138.00
- 39. SHPS Money Purchase (4%) Before salary exchange After salary exchange Annual Salary pa £42,000.00 £40,320.00 Monthly Gross Pay pm £3,500.00 £3,360.00 Employee pension contribution 4% pa £1,680.00 £0.00 pm £140.00 £0.00 Additional employer Pension contribution pa £0.00 £1,680.00 pm £0.00 £140.00 Employee NI pa £4,173.00 £3,971.40 pm £347.75 £330.95 Employer NI pa £4,820.06 £4,588.22 pm £401.67 £382.35 Employee take-home pay (pre income-tax) pa £36,147.00 £36,348.60 pm £3,012.25 £3,029.05 Employee saving per month £16.80 Employee saving per annum £201.60 Employer saving per month £19.32 Employer saving per annum £231.84
Notes de l'éditeur
- This presentation aims to provide you with more information in connection with introduction of Salary Exchange for pension contributions under the Social Housing Pension Scheme (‘SHPS’). It also aims to answer any questions you may have in relation to the introduction of Salary Exchange for pension contributions and how the arrangement will affect you. We have no plans to change the basis of the pension schemes we currently sponsor, however we are always looking to make these more attractive and sustainable. The changes that we are now making are good for you as members as they provide a new way of making pension scheme contributions in a National Insurance efficient manner. This should lead to an increase in your take home pay. Details of where to find out more are contained on the penultimate slide.
- Salary Exchange arrangements provide the opportunity for employees and MHP to reduce their National Insurance Contributions. As a result, your take home pay will increase. It does not reduce your SHPS retirement benefits. Like a lot of final salary arrangements, we currently have a shortfall in connection with the Final Salary Section of SHPS. The savings that we as an employer will make from incorporating Salary Exchange for pensions will be used to reduce this shortfall over time. We will also look to continually review this position. We are aware that a number of other employers who participate in SHPS operate successful Salary Exchange arrangements.
- We recognise that pensions is a complex area so we have tried to structure this presentation in an easy to read format. This presentation covers the topics detailed above The wider benefits of Pick Your Own are covered under a separate presentation.
- This presentation is aimed at current members of SHPS. As a reminder, SHPS currently consists of three Sections: The Final Salary Section (which closed to new members with effect from April 2007) The CARE Section (which opened in April 2007 and closed to new entrants with effect from 31 October 2010) and The Money Purchase Section (which opened to new entrants with effect from 1 October 2010) If you are a contributing member of any of the above ‘Sections’, with effect from 6 April 2012 you can choose for your pension contributions to be met using our Salary Exchange arrangement
- If you are not currently a contributing member of any of the aforementioned Sections of SHPS, or an employee who may wish to join SHPS in the future this presentation is not for you. Members of any non SHPS pension arrangements (referred to as ‘Legacy Pension Arrangements’) are not, at this time, eligible to participate in our Salary Exchange arrangement for pensions. If you have any questions as to which pension arrangement you are currently a member of, please turn to the penultimate slide and contact one of the individuals named.
- Let’s take a look at what Salary Exchange actually is.
- Salary Exchange for pension contributions is a cost effective way of making pension scheme contributions. It is designed to increase your take home pay by reducing your National Insurance Contributions without affecting your retirement benefits from MHP. Virtually all SHPS members will benefit. We believe most employees will be better off and will want to participate. Salary Exchange occurs when you give up the right to receive part of the cash pay due under your Contract of Employment. This is a formal change to the terms and conditions of your employment. This allows you to take advantage of National Insurance Contribution savings. Following entry into Salary Exchange, your contractual pay with MHP will be changed for the duration of the Scheme year, which runs from April to March.
- So, let’s take a look at how Salary Exchange for pensions actually works…..
- This diagram represents your current gross pay and how it is broadly broken down between income tax, National Insurance and pension contributions. At the moment your pension contributions to SHPS are taken in the form of a separate deduction on top of your other usual deductions as listed above.
- Under a Salary Exchange arrangement you enter into an arrangement with MHP and effectively rearrange the way in which you save for your pension by replacing your own contributions with corresponding contributions made by MHP.
- As your pension contribution is being paid by MHP this reduces your National Insurance liability MHP are obliged to pay the contributions you would have paid direct to SHPS
- The following slides show some practical examples of how Salary Exchange works. We have produced a number of examples illustrating the savings for members in the three SHPS Sections, however, the principles are broadly similar. The current contribution rates and associated benefits at retirement under each of the Sections is as follows: Final Salary Contributions are on a fixed age related scale: Under age 30 = 8.4% employee Age 30 – 39 = 9.4% employee Age 40 plus = 10.4% employee MHP’s contribution is currently 7.8% Benefits at retirement Based on: Members service: 10 years Members Final Pensionable Salary: £40,000 10/60 X £40,000 = £6,667 per annum CARE Contributions are on a fixed age related scale: Under age 30 = 5.5% 31-39 = 6.5% 40 plus = 7.5% MHP’s contribution is also age related (7.8%) Benefits at retirement Based on: Members service: 10 years Members Final Pensionable Salary: £40,000 Members Revalued Career Average Earnings: £30,000 10/60 X £30,000 = £5,000 per annum Money Purchase Contributions are on a matching structure as follows (this is limited to a maximum Company contribution of 8%): Employee 4%Company 4% Employee 5%Company 5% Employee 6%Company 6% Employee 7%Company 7% Employee 8%Company 8% Benefits at retirement Your benefits at retirement will be dependant upon the value of your Money Purchase ‘Account’. The value of your ‘Account’ will be depend on the contributions paid whilst you were a member and the investment returns achieved. The amount of benefit you will receive will depend upon the value of your ‘Account’ and the annuity rates when you retire. Please be careful to consider the example relative to the SHPS Section of which you are a member (Blue = Final Salary Section, Purple = Care Section and Green = Money Purchase Section) If you are unsure of this please make contact with one of the individuals listed on the penultimate slide of this presentation.
- This is a very basic example to try and let you understand the mechanics of Salary Exchange. It assumes that the individual is a member of the Final Salary Section and has a salary of £14,000. The left hand column shows the pre Exchange position on a monthly basis – This individual pays a monthly contribution of £121.33 per month to the Final Salary Section. Corresponding NI and Net pay are £56.16 and £989.18 respectively. You should bear in mind that Income Tax remains at the same level pre and post exchange as pension contributions are deducted from gross salary.
- Once this individual exchanges, MHP pays the pension contribution of £121.33, which reduces their gross pay by the same amount, meaning that the NI is reduced to £43.54, leading to an increased take home pay of £1,001,80 each month. An increase of £12.62 per month or £151.44 per annum. More detailed examples are in the Appendix for each Section.
- Let’s take a look at whether Salary Exchange for pensions is right for you….
- We plan to operate our Salary Exchange arrangement for pensions indefinitely. It is important to note that the arrangement is approved by Her Majesty’s Revenue & Customs. However, if tax, National Insurance or pension law changes, or it is no longer viable for MHP to operate it, MHP reserves the right to withdraw it. If you are on maternity leave (or planning to) or you work part time, your salary will be reduced and Salary Exchange for pensions may not be right for you.
- We continually look for ways to improve benefits and make sure they are efficient. We have structured our Salary Exchange arrangement so that virtually all employees will benefit and will not be disadvantaged. Our Salary Exchange arrangement means that all members can benefit from National Insurance Contribution savings. Participating in Salary Exchange will therefore mean more money for you in your take home pay each month.
- Entitlements to some benefits such as Statutory Sick Pay, Incapacity Benefit and Job Seekers Allowance is based on the amount of National Insurance that has been paid. National Insurance does not apply to earnings below the Lower Earnings Limit (currently £5,304 per annum) Salary Exchange for pensions will however, have an impact on any other statutory benefits in the following ways: Statutory Sick Pay – Employees who are sick for at least four days in a row and earn more than £5,304, are entitled to Statutory Sick Pay at the standard rate of £81.60 per week. Entitlement is lost if earnings, before tax and National Insurance deductions fall below £5,304. Incapacity Benefit – This can be paid on the expiry of Statutory Sick Pay (after 28 weeks) and in certain other situations. The rate is £84.15 per week for week 29 to 52 and £94.25 per week after week 52. It depends on sufficient National Insurance Contributions having been paid. If salary has been exchanged to a level below £5,304 this may affect entitlement. Tax Credits – Entitlement to Working Tax Credit and Child Tax Credit is based on earnings after deduction of pension scheme contributions. Your entitlement to tax credits may be affected if Salary Exchange results in your pay being below £5,304. Job Seekers’ Allowance – Entitlement to Jobseeker’s Allowance is affected by, amongst other things, sufficient National Insurance Contributions having been paid. If salary has been exchanged to a level below £5,304 this may affect entitlement. Statutory Adoption Pay – Entitlement and rate are the same as for Statutory Paternity Pay except that Statutory Adoption Pay is payable for up to 26 weeks. Statutory Maternity Pay – Entitlement to Statutory Maternity Pay depends on a woman earning above £5,304 per annum and having been employed with the same employer for at least 26 weeks, 15 weeks before the baby is due. If earnings are exchange to a level below £5,304, Statutory Maternity Pay entitlement will be lost. Maternity Allowance may be payable instead if earnings are still above £30 per week. Even if earnings remain above £5,304 per annum, the amount of Statutory Maternity Pay payable will be affected by any salary exchanged. The rate of Statutory Maternity Pay is 90% of average earnings (after Salary Exchange) for the first six weeks. After the first six weeks, the rate of Statutory Maternity Pay drops to the lower of 90% of earnings and £128.73 per week. Statutory Paternity Pay – Entitlement to Statutory Paternity Pay is the same as for Statutory Maternity Pay, so earnings should not be reduced below £5,304 if entitlement is to be retained. Statutory Paternity Pay is payable for up to two weeks at a rate of the lower of 90% of average earnings (after Salary Exchange) and £128.78 per week. Therefore, even if earnings are above £5,304, the amount of Statutory Paternity Pay payable would be affected if earnings fall below approximately £143 per week. If you have any questions concerning any of the above benefits, please make contact with an individual named on the penultimate slide of this presentation in order to obtain further information. Student Loans – Salary Exchange will not have any effect on the repayment of any Student Loans.
- It is important to understand the two elements of the State benefits. The State currently offers two levels of pension to employees: Basic State Pension – Salary Exchange will not affect the Basic State Pension. State Second Pension – This is a reformed version of the State Earnings Related Pension Scheme (SERPS). The actual amount by which your final State Second Pension is reduced and the National Insurance savings you will get is individual to each person and is based upon your earnings. It is important to recognise whether you are contracted out of the State Second Pension. If you are a member of the SHPS Final Salary or CARE sections, you are contracted out of the State Second Pension. This means SHPS is responsible for providing your State Second Pension benefit and not the State. If you are a member of the SHPS Money Purchase section, you are contracted in to the State Second Pension. This means that the State remain responsible for providing your State Second Pension and not SHPS. For further information on how Salary Exchange can affect benefit entitlement, you should contact the Department for Work and Pension on www.thepensionservice.gov.uk or call 0845 60 60 265. Participation in Salary Exchange may have a slight impact on your State Second Pension if you are a Money Purchase section member.
- By participating in SHPS via Salary Exchange, you are effectively consenting to a change to the terms and conditions of your employment. This will take effect from 6 April 2012. Because you are no longer required to pay into the scheme as your base pay will be reduced. This change will allow you to take advance of National Insurance Contribution savings as discussed earlier in this presentation. Your contractual pay will be changed for the duration of the Scheme Year (i.e. April to March) Once signed up for Salary Exchange, you will not be able to opt-out until April 2013 (and then each subsequent April), unless you experience one of the Lifestyle Events (contact one of the individuals detailed on the penultimate slide of this presentation if you require further information concerning this point)
- The majority of SHPS members will benefit from participating in our Salary Exchange for pensions arrangement. Generally, if you are earning less than £12,000 per annum, (including whether you are part time and this is your part time earnings) you may find that Salary Exchange for pensions is not in your best interests, depending on whether you choose other benefits through Pick Your Own. MHP will communicate separately with any individuals who may be affected in order to inform them of this.
- By participating in the Salary Exchange arrangement, you will not receive a refund of any pension contributions for any period during which you have participated in Salary Exchange. This is because your own contributions have effectively been paid for you by MHP. The option of transferring your benefits to another registered pension arrangement is also available.
- If you are interested in joining the Salary Exchange arrangement for pensions, here is what you have to do….
- The election window for Pick Your Own opens on 5 March 2012 and will remain open until 23 March 2012. SHPS members will automatically be signed up to the Salary Exchange arrangement. You MUST acknowledge this as part of your flex enrolment by ticking the relevant box within the Pick Your Own system and clicking on ‘Request this benefit package’. Ticking the relevant box will confirm that you have read and understood the terms and conditions. Your activation log on token will be provided to you in the post. Pension contributions to SHPS will switch to Salary Exchange with effect from 6 April 2012. We will contact you at your home address confirming the change has been effected.
- If you decide that Salary Exchange is not for you, and you do not wish to benefit from the National Insurance Contribution Savings, you will need to log onto the Pick Your Own website and opt out of pension Salary Exchange. If you don’t join you won’t benefit As a result of opting out, you will continue to participate in SHPS on the current basis. You should also note that you are able to opt out of Salary Exchange if you undergo a lifestyle event. A lifestyle event is a major change to your personal circumstances. Some examples of what might constitute a lifestyle event are detailed below: Birth/adoption of a child Return from maternity/adoption leave Start of marriage/civil partnership End of marriage/civil partnership Material change in partners/dependant’s circumstances Commencement of a period of long term absence Return from a period of long term absence or secondment Commencement of or return from long term sickness Moving from a fixed term contract to a permanent contract
- SHPS members will automatically be signed up to the Salary Exchange arrangement. Your only action is that you MUST acknowledge this as part of your flex enrolment by ticking the relevant box and ‘Request the benefit package’ within the Pick Your Own system. Ticking the relevant box will confirm that you have read and understood the terms and conditions. If you do not do this between 5 March 2012 and 23 March 2012 (despite our chasers), we will assume that you wish to participate in the Salary Exchange arrangement. In any event, action is required on your part and we would appreciate your cooperation with this.
- You should not forget about the wider Pick Your Own offering. Pensions forms a small part of this. Further information on the benefits available and the tax savings that can be made can be found by visiting the Pick Your Own presentation or by visiting the website directly. If you have any questions in the meantime concerning Pick Your Own, please make contact with Peter Garratt.
- If after reading through this presentation you are concerned about whether Salary Exchange for pensions will be beneficial for you or you have any questions, please make contact with one of the above individuals. Alternatively, you may wish to seek independent financial advice. This can be obtained via www.unbiased.co.uk. Please note any costs associated with advice obtained from an independent financial adviser will not be met by MHP.
- As well as being able to elect to have your pension scheme contributions paid via the Salary Exchange arrangement, if you are a Money Purchase Section Member, you can also elect to change your own contribution rate. If you are not a member of SHPS you can still join! You can enrol into the SHPS Money Purchase Section. If you are interested in this please contact one of the named contacts detailed in the previous slide.
- SHPS Final Salary The above example is based on an annual salary of £14,000 The “Before Salary Exchange” column reflects the current position for members. In the “After Salary Exchange” column the gross pay reduces by the amount of pension contributions. The amount of National Insurance reduces accordingly and the net pay position is enhanced. You will see that, on this basis, as an employee you can save £151.42 per annum
- SHPS Final Salary The above example is based on an annual salary of £25,000 The “Before Salary Exchange” column reflects the current position for members. In the “After Salary Exchange” column the gross pay reduces by the amount of pension contributions. The amount of National Insurance reduces accordingly and the net pay position is enhanced. You will see that, on this basis, as an employee you can save £270.40 per annum
- SHPS Final Salary The above example is based on an annual salary of £42,000 The “Before Salary Exchange” column reflects the current position for members. In the “After Salary Exchange” column the gross pay reduces by the amount of pension contributions. The amount of National Insurance reduces accordingly and the net pay position is enhanced. You will see that, on this basis, as an employee you can save £485.63 per annum
- SHPS CARE The above example is based on an annual salary of £14,000 The “Before Salary Exchange” column reflects the current position for members. In the “After Salary Exchange” column the gross pay reduces by the amount of pension contributions. The amount of National Insurance reduces accordingly and the net pay position is enhanced. You will see that, on this basis, as an employee you can save £109.20 per annum
- SHPS CARE The above example is based on an annual salary of £25,000 The “Before Salary Exchange” column reflects the current position for members. In the “After Salary Exchange” column the gross pay reduces by the amount of pension contributions. The amount of National Insurance reduces accordingly and the net pay position is enhanced. You will see that, on this basis, as an employee you can save £195.00 per annum
- SHPS CARE The above example is based on an annual salary of £42,000 The “Before Salary Exchange” column reflects the current position for members. In the “After Salary Exchange” column the gross pay reduces by the amount of pension contributions. The amount of National Insurance reduces accordingly and the net pay position is enhanced. You will see that, on this basis, as an employee you can save £358.96 per annum
- SHPS Money Purchase The above example is based on an annual salary of £14,000 The “Before Salary Exchange” column reflects the current position for members. In the “After Salary Exchange” column the gross pay reduces by the amount of pension contributions. The amount of National Insurance reduces accordingly and the net pay position is enhanced. You will see that, on this basis, as an employee you can save £67.20 per annum Contributions are shown at the 4% level (i.e. the minimum level). If you were to contribute a higher amount, say, 8% (to maximise employer matching arrangement) the savings would double.
- SHPS Money Purchase The above example is based on an annual salary of £25,000 The “Before Salary Exchange” column reflects the current position for members. In the “After Salary Exchange” column the gross pay reduces by the amount of pension contributions. The amount of National Insurance reduces accordingly and the net pay position is enhanced. You will see that, on this basis, as an employee you can save £120.00 per annum Contributions are shown at the 4% level (i.e. the minimum level). If you were to contribute a higher amount, say, 8% (to maximise employer matching arrangement) the savings would double.
- SHPS Money Purchase The above example is based on an annual salary of £42,000 The “Before Salary Exchange” column reflects the current position for members. In the “After Salary Exchange” column the gross pay reduces by the amount of pension contributions. The amount of National Insurance reduces accordingly and the net pay position is enhanced. You will see that, on this basis, as an employee you can save £201.60 per annum Contributions are shown at the 4% level (i.e. the minimum level). If you were to contribute a higher amount, say, 8% (to maximise employer matching arrangement) the savings would double.