PensionSmart
What is PensionSmart (salary sacrifice option)?
PensionSmart is the way to contribute to USS as a salary sacrifice option that will reduce the amount of national insurance deducted from your pay and increase your take home pay.
At the moment, your pension contributions are paid before tax, directly into the scheme. By joining PensionSmart you agree to give up an amount of your contractual gross pay equal to your contributions. In return the University increases its contributions by an equivalent amount. PensionSmart will not affect any other salary related payments or benefits that you receive from the University such as salary increase or overtime. These will be based on 'reference salary' which is your basic pay before PensionSmart. Your pensionable salary will be based on your reference salary including any other earnings as may be recognised by the University as pensionable.
Your reference salary will also be the amount used in any personal official letters for example mortgage references, loan applications or job references etc.
By participating in PensionSmart you are agreeing to a change in your terms and conditions of employment.
You will be automatically enrolled in PensionSmart after 3 months continuous service providing you meet the relevant criteria.
Any pension contributions made under PensionSmart cannot be refunded if you opt out of the Pension Scheme with less than two years Pension scheme membership - e.g. if your contract is for less than two years and you leave the University you would not be entitled to a refund of your contributions, you will only be entitled to a transfer value or a deferred pension.
How much can I save in National Insurance?
|
Annual pensionable salary |
USS NI contribution per month |
PensionSmart NI Contributions per month |
NI estimated saving per month |
|---|---|---|---|
| £15,000 | £54.36 | £39.96 | £14.40 |
| £20,000 | £104.36 | £85.16 | £19.20 |
| £30,000 | £204.36 | £175.56 | £28.80 |
| £40,000 | £304.36 | £265.96 | £38.40 |
| £60,000 | £423.26 | £413.66 | £ 9.60 |
| £80,000 | £456.59 | £443.79 | £12.80 |
Am I eligible for PensionSmart
Your are eligible as long as your actual annual salary is above our Pay Protection Limit - currently £8800 per annum.
You must participate in PensionSmart for a minimum of 12 months unless you have a lifestyle change
- Pregnancy; birth or adoption of a child
- Marriage or divorce
- Death of a dependent or someone on whom you are financially dependent
- Redundancy of a partner or someone on whom you are financially dependent
- Any other exceptional reason with prior agreement from the University
If you wish to opt out when a lifestyle event occurs please email payroll@stir.ac.uk
What if I do not wish to participate in PensionSmart?
If you do not wish to participate please request to opt out of PensionSmart only, by emailing payroll@stir.ac.uk
If you decide to opt back in to PensionSmart at a later date you will only be able to do this by informing payroll@stir.ac.uk before the next opportunity to change which is the 1st August each year, e.g. if in November you wish to opt back in you will not be entered into PensionSmart until August of the following year.
If I have been automatically opted out of PensionSmart can i opt back in?
If you have been automatically opted out it is unlikely that you would benefit from opting back in. If your salary increases and goes above the Pay Protection Limit you will be automatically opted back in the following August.
Will PensionSmart affect my pension benefits?
Retirement pension - your pension at retirement will be unchanged as it is based on your reference salary.
Death in Service and Spouse's pension - these benefits are unchanged and will continue to be based on your pensionable salary
State Benefits - Entitlement to many state benefits, including basic state pension, is based on the amount of NI contributions you pay. This scheme reduces the amount of these contributions. The employees affected are generally those who by participating in PensionSmart reduce their salary below the lower earnings limit at which NI is not payable. In order to protect those who may be affected we have introduced a Pay Protection Limit of £8,800 pa. If your salary is less than this you will automatically be excluded from PensionSmart. This is to protect you so that you do not miss out on other vital state benefits.
Other points to consider
Participation in other Salary Sacrifice schemes - If you currently participate in the childcare voucher scheme or cycle to work this will be taken into account when deciding if you will be automatically enrolled in PensionSmart. You will be informed if you will be automatically opted out.