Increasing salary sacrifice before maternity

kidmugsy

Alexland wrote: »

Not sure how I can make it much clearer.

You can make it clearer by accompanying a %age by a statement of what you mean the %age to be a %age of. It's entirely opaque at the moment. You presumably know what you mean by I am not privy to that implicit knowledge.

Alexland

Thrugelmir wrote: »

What did her revised issued contractual terms say after the sacrifice was made.

Our employer doesn't issue us any paperwork when we change the percentage. We just raise a call with HR asking for a one off or ongoing salary sacrifice change and they reply confirming they have actioned the request and from when we should see the payroll change. They sent us an email about 10 years ago to inform us they were automatically switching our pension contributions to salary sacrifice but it didn't have any detail. This situation is too niche to be mentioned in the pension or maternity policies.

Alex

Alexland

kidmugsy wrote: »

You can make it clearer by accompanying a %age by a statement of what you mean the %age to be a %age of. It's entirely opaque at the moment. You presumably know what you mean by I am not privy to that implicit knowledge.

So as a simple example if the employee salary is set at £25k then the company would offer up to £2.5k (10% matched) into the pension. By sacrificing £3.75k (15%) the employer pension contribution increases to £6.25k (25%) and the employee is only paid £21.25k (85%) but less after tax etc. My understanding from the top post is that during maternity the company is required to continue paying their £6.25k (1/12th per month) even though the employee's pay is gradually reducing down to Statutory Maternity Pay and then nothing during the 12 month period?

Alex

Imelda

Would this be treated the same way as salary sacrifice for childcare vouchers? There was a ruling saying that employers did not need to continue to pay them during maternity leave.

Paul_Herring

Imelda wrote: »

Would this be treated the same way as salary sacrifice for childcare vouchers? There was a ruling saying that employers did not need to continue to pay them during maternity leave.

During maternity leave, or from maternity payments? Subtle difference...

Is it this you're referring to?: http://www.childcare-vouchers.net/parents/faqs/am-i-allowed-to-receive-childcare-vouchers-or-any-other-benefits-whilst-on-maternity-leave/

Am I allowed to receive childcare vouchers, or any other benefits, whilst on maternity leave?
The simple answer is yes you are but you are also subject to any terms and conditions agreed with your employer.
You cannot have any deductions by way of a salary sacrifice from any statutory payments. You cannot salary sacrifice from statutory maternity or paternity pay. And this issue is not simply a childcare voucher issue, it applies to all benefits offered to you.

Alexland

So are we coming to a consensus that the employer might have the right to have a policy that they do reduce their sal sac contributions during maternity leave if they are not backed by sufficient maternity earnings? In which case the top post guidance for employers is incorrect?

Thrugelmir

Alexland wrote: »

In which case the top post guidance for employers is incorrect?

Seems totally correct.

My questions would relate more to your employers scheme. As doesn't appear to be a pure salary sacrifice scheme, with the employer making matched contributions up to 10% of the amount sacrificed. Appears more of an artificial arrangement to save on both Employees and Employers National Insurance contributions. As I mentioned previously there's no contractual paperwork to support the payroll changes.

Off the top of my head. Maternity pay, student loan repayments holiday pay and pay in lieu of notice could be effected by arbitarily adjusting gross pay.

All in all seems too flexible.

Alexland

Hmm I will ask my wife to raise a call with our company's HR to understand the basis for why they reduced the salary sacrifice pension contribution during her previous maternity.

We will probably increase her contribution rate first incase the employers agrees their responsibility and puts an upper cap on % sal sac to limit their exposure to the issue.

User6565

It proved quite lucrative for me. Normally I salary sacrifice 10% of my salary and my employer contributes 10%. While on mat leave I paid the 10% of whatever I was earning until I hit SMP and I paid in 0. My employer carried on paying their usual contribution regardless of my actual salary until I came back. This time round they will also pay my childcare vouchers as well as usual pension contributions. I don’t think enough people recognise the pension as a great benefit during mat leave as they just look at maternity pay and not the whole package.

[Deleted User]

User6565 wrote: »

It proved quite lucrative for me. Normally I salary sacrifice 10% of my salary and my employer contributes 10%. While on mat leave I paid the 10% of whatever I was earning until I hit SMP and I paid in 0. My employer carried on paying their usual contribution regardless of my actual salary until I came back. This time round they will also pay my childcare vouchers as well as usual pension contributions. I don’t think enough people recognise the pension as a great benefit during mat leave as they just look at maternity pay and not the whole package.

They no longer have to pay childcare vouchers as part of your maternity.