Pension: Salary sacrifice scheme types

frankdoylezw

Hello,

Hoping for some help, please. I am currently enrolled on my company's salary sacrifice scheme. It seems to be a 'Simple' (and not 'SMART') scheme, though the company says that they nevertheless will pass on all employer NIC savings to the employee. 

I was under the impression that there were only two types of schemes:

a) Simple: Employees NIC savings are added to their pay. Employer's NIC savings are kept by employer and not passed on
b)SMART: Employee and Employer's NIC savings are added to the pension payment.

What appears to happen at our company is that there is a simple scheme in operation, but the employee's NIC savings are added to their pay, whilst the employer's savings are paid into the pension - a hybrid of a) and b) above, essentially.


(Note: There is a 'moneyBeans uk' salary sacrifice calculator that allows for a 'Simple' scheme but where 100% of the employer's savings are passed on to the employee - so it does appear to be a possible option: [Link not possible as I'm new here!])

Have I misunderstood how salary sacrifice schemes operate? Is this 'third' model one that I'm not aware of? 
Are there downsides to this approach? e.g. if the employee's NIC savings are paid to their pay then they're taxable?

Grateful for any clarity that anyone can provide.

Albermarle

e.g. if the employee's NIC savings are paid to their pay then they're taxable?

With a salary sacrifice scheme, you just pay less NIC because your salary is less. There is no adding of NIC savings to you salary.

Regarding your employer passing on their NIC savings. Whatever method they use you are relatively lucky as many employers just keep the savings for themselves.