Pension Arrears

JenCad20

Hi, I work for the NHS and this month we recieved our 3% payrise which has been backdated to April, fab! 
But as I am signed up to the pension scheme, recieving this backdated pay along with backdated payments from working night shifts/unsociable hours since april, its pushed my earings into a higher pension contribution meaning i had to pay arrears on my pension. These arrears have actually worked out to be higher than the back pay i recieved! Its all very complicated and i dont really inderstand it all. 
So my main question should paying arrears to my pension be voluntary and is there any way around it?

Flugelhorn

 I think that the pension rate is based on the overall pay for the year so it may be that at the end of the financial year you can claim some back - because lots of money appears in the pay one month the system assumes that you get that every month hence lots going in pension payments - you need to speak to your pension team 

I used to have to guess my rates (bad I know  - I had several employers and they all asked what rate we wanted for the pension) at the end of the year we had to do a declaration of what we had earned and what we had paid and either pay more if it was too low or got some back if it was too high.  I used to have to keep track and decline work at the end of the year as one too many sessions cost me £1000

Thrugelmir

JenCad20 said:

So my main question should paying arrears to my pension be voluntary and is there any way around it?

Only by opting out of the scheme entirely. End of the day you will receive an enhanced pension for life. 

Nebulous2

The contribution rates are here. Pension contributions and tax relief | NHS Employers

They are based on pensionable pay, so would exclude any overtime. If you jump from one contribution rate to the next you would need to make pension contributions at the higher level. While backdated pension costs could make a big dent in a 3% backdated pay increase, it shouldn't swallow it up completely. 

MX5huggy

It’s the problem when contributions change for the whole amount at a threshold rather than the higher rate only being charged on the amount above a threshold (in the same way income tax works). There’s these cliff edges where earn 1p more it costs you dearly.

So that penny that takes you to £26824 costs you £590. I think all you can do is see it as some short term pain while you move through the pay grades and get to higher pay. 

JenCad20

Thanks everyone, its a frustrating process as it wasnt something i had anticipated happening. 
My back pay was £20 more than what was taken as arrears so was a shock!