PensionPlusUSS Presentation

By Jenny Casey & Ben Hancock

Pensions Payroll

PensionPlus

What is PensionPlus? Why is LSE introducing PensionPlus? Who else has introduced it? How does PensionPlus work? Pay Advice changes What are the benefits? Is PensionPlus for me? Participation Where can I find out more details? Questions?

What is PensionPlus?

At present, your pension contributions are tax efficient.

Under PensionPlus the total employee and employer contributions will be paid to USS by the School.

NIC Savings for the employee and SchoolAt present AVCs will not be included.

Why is LSE introducing PensionPlus?

USS have changed their rules.The LSE believes that this will be

advantageous to employees to maximise their take home pay by a reduction in their National Insurance contributions.

The School will also benefit from lower National Insurance costs.

Consultants

PricewaterhouseCoopers (PWC).Why PWC?PWC will seek HMRC approval which will

enable us to go ahead with the scheme in July 2009.

Other Institutions who have implemented their own versions of PensionPlus:

OxfordUSS LtdUniversity of ExeterUniversity of SouthamptonUniversity of BirminghamImperial College LondonUniversity of London Senate House

How does PensionPlus work?

Your current employee pension deduction will be reduced to nil.

The School will then pay an increased payment to the Pension Company made up of your contribution along with the standard employer contribution.

Your total pay each month will be reduced by an amount equivalent to your original pension contribution.

Member

Employer Scheme

PAY

Mem

ber contribution

Employer contribution

Existing Arrangement

New Arrangement under PensionPlus

Member

Employer Scheme

Pays re

duced sa

lary

Member contribution

Employer contribution

Changes to your Pay Advice

Pre-PensionPlus (Current):

With PensionPlus:

What are the benefits?

Your take home pay will increase.

The School will make a saving.

Annual National Insurance Savings

Annual Salary Annual Employee NIC saving

£15,000 £89.54

£20,000 £119.34

£25,000 £149.23

£30,000 £179.07

£35,000 £208.92

£40,000 £238.76

£45,000 £201.83

£50,000 £31.75

£55,000 £34.93

£60,000 £38.10

Will PensionPlus reduce my pension benefits?

No Your full pensionable salary will be

unchanged.Retirement calculations will still use the full

pensionable salary.Death in service lump sum payments will

be calculated on the full pensionable salary.

When PensionPlus may not be advantageous to you

Members with 2 years or less pensionable service who wish to leave the scheme.

What happens to my contributions?

Your contributions can either:

a) be used to transfer to another scheme after leaving.

b) be used in the calculation of benefits at retirement age.

What if I do not wish to participate in PensionPlus?

You do not need to participate in PensionPlus as it is not compulsory, however the School initially intends to enter all USS members into PensionPlus.

If you decide to opt out of PensionPlus then your current pension arrangements will continue as before.

Can I opt back into the scheme?

Yes you will be able to opt back into PensionPlus but only on the anniversary date of PensionPlus which will be 1 July on each year.

Where can I find out more details?

Information booklet.School website under HR or Pensions.Power Point Slides.

Questions?