CARE scheme, anyone have info...?

james3333

Hi
my company have recently 'changed' our final salary scheme to a CARE / SMART pension.
from what i can gather, i no longer contribute to the scheme, the company do on my behalf aswell as contributing thier usual 8.7%, but this is deducted from my take home pay, then put back on as a CARE adjustment.
apparently, they are doing this and i will benefit from paying less National insurance per month and as a result my take home pay will increase ( not by much, maybe £10)
seems like a win, win situation, anyone know of any catches or why they would do this?

cheers.

EdInvestor

See the thread on "salary sacrifice" at the top of the forum.It will affect your state pension.

james3333

i have read that post, but iam still unsure what it means for me.
will my state pension be lower due to less NI contriubutions?
and what about this 12.8% will my company be pocketing that amount or giving me some of it?
where does the figure 12.8% come from anyway?
cheers.

james.

jonathon_hart

Hi James.

I would suggest these questions are best put to the administrators of the scheme.

A CARE scheme will give you a fixed pound pension each year (generally 1% of your salary - but again check the scheme rules!) This will then be revalued (increased) each year generally by RPI (again read the rules!!!)

E.g

Year 1 salary is £10,000. Pension is £100
Year 2 salary is £11,000. Pension is £110 + £100*RPI
etc...

On the subject of the NI if they are talking about reducing your NI my guess would be that they have contracted you out of SERPs/ S2P - see the various threads on this around the board - this will affect your state pension.

Thanks

Jonathon