New Job pension - not salary sacrifice

Alexland

It's not the pension that's sal sac but the payroll and HR arrangements that the employer operates that enables it to legitimately make only employer contributions into the pension.

It doesn't make sense that their payroll and HR cannot cope with making the employer only payment into their own scheme yet is ready to make the same employer only payment into whatever personal pension you choose to use. That's much harder because there are lots of different schemes they would need to maintain the facility to pay into.

I suggest that whoever you are talking to probably doesn't understand salary sacrifice and thinks its a feature of some personal pensions without realising its about how the employer operates payroll and contracts its employees.

Marcon

Alexland said:

It's not the pension that's sal sac but the payroll and HR arrangements that the employer operates that enables it to legitimately make only employer contributions into the pension.

It doesn't make sense that their payroll and HR cannot cope with making the employer only payment into their own scheme yet is ready to make the same employer only payment into whatever personal pension you choose to use. That's much harder because there are lots of different schemes they would need to maintain the facility to pay into.

I suggest that whoever you are talking to probably doesn't understand salary sacrifice and thinks its a feature of some personal pensions without realising its about how the employer operates payroll and contracts its employees.

Couldn't agree more - and whether they manage to set up a salary sacrifice scheme in line with HMRC's requirements has to be open to question. What OP is being told makes no sense at all, commercially, administratively or any other way!

Hannah2

Hi All, well I just asked the questions again..... and I was correct in what I posted. I can opt to pay into a personal pension (not the company nominated scheme) with two options, either the employer and employee contribution, or by a salary sacrifice together with the employer pension.  If I opted to do as a salary sacrifice then I would sign an exchange letter detailing the amounts involved, which would be employer % contribution + sacrificed amount + equivalent of NIC on the sacrificed amount.
They also confirmed that "The salary sacrifice amount saves more as the saving on employer national insurance is paid to the pension in addition"

Hannah2

dunstonh said:

They did say that it would involve a lot of paperwork if I did want to use salary sacrifice to a personal pension, but that it was possible.

It's certainly possible, but it's a manual process.  If your pensionable income doesn't change from month to month, then it will likely need work from you and the employer once a year.   If your pensionable pay changes each month then its a logistical nightmare with a limited window each month to get it correct with work required by you and the employer each month.

My salary is a set amount so it should not change each month, so this should not be an issue.

Hannah2

Albermarle said:

Independent financial advice is not cheap, and normally would not be appropriate/too expensive for this type of decision .

Hi, thank you, but it wouldn't just be about this decision