PensionsPlus

Rosie75

I am currently in the Universities' Superannuation Scheme, and my employer is launching something called PensionsPlus. They have told us very little about this so far, and we will not be given very long to decide to opt out of it. The little I know comes from this webpage:
http://www2.warwick.ac.uk/insite/newsandevents/intnews2/warwick_to_launch.
Now, it seems to me that reducing National Insurance contributions cannot be a good thing in the long run. Can it? I'd be grateful for any thoughts on this as pension schemes are a source of great confusion to me. I can't believe that the University is doing this to benefit anyone but itself - or am I just cynical?

dunstonh

I havent read anything about it before now but it looks like a form of contracting out of S2P.

jonathon_hart

I would agree it looks like contracting out.

ReflexSilver

I think you'll find it's a salary sacrifice type arrangement. My brother mentioned something about it to me a while back (he's in USS).

Quick google threw up this from Bath University.

http://www.bath.ac.uk/pensions/pensionplus-booklet.pdf

Debt_Free_Chick

Agreed, it looks more like salary sacrifice, which is simply a different way of paying pension contributions. You're right to be wary though - paying fewer NICs might not be a good idea, but it depends on what you earn.

And, salary sacrifice can't be forced on you - you have to sign up for it.

Rosie75

Thanks for all your replies. I earn about £38k, shortly to go up to £40k, at the moment, and am aged 33 (if that makes any difference). It looks like I'm going to have to get my head around the "contracting out" issues! It's rather annoying that they haven't circulated any detailed info yet and are saying we have to specifically opt out, and by next month.

Debt_Free_Chick

Rosie75 wrote: »

It looks like I'm going to have to get my head around the "contracting out" issues!

It's not contracting out.

You give up some salary - equal to what you currently pay to the USS. In return, your employer pays an extra amount to USS, equal to what you would have paid.

It's rather annoying that they haven't circulated any detailed info yet and are saying we have to specifically opt out, and by next month.

Are they definitely introducing it next month? I agree, that for a change like this, this doesn't leave a reasonable amount of time.

Look at the link ReflexSilver posted earlier - this one

http://www.bath.ac.uk/pensions/pensionplus-booklet.pdf

dunstonh

Actually, how its written it could be salary sacrifice or contracting out. However, I'm not sure it is salary sacrifice on the basis that it says your take home pay will be higher. Although the other links certainly do describe salary sacrifice.

In which case, i think its a badly worded release as the odds are they mean salary sacrifice but that wont see an increase in take home pay (although you pay less NI and tax it goes into the pension but reduces your net pay and if employer shares some of their gain you get more overall)

Rosie75

Thanks for that, Debt Free Chick. I'm slowing getting my head around salary sacrifice thanks to other threads on this board. From what I can see the benefit lies almost entirely with the employer? The extra-take home pay seems to be negligable (£10 per month or thereabouts).

Yes, it's starting from 1 August and we have until 28 July to opt out (and we haven't received any detailed information about the scheme yet). When you consider that a lot of academics are away on holiday or research in July it does seem rather opportunisitic...

jonnibgood

But its free money for doing nothing!
What is your view now, having participated in it for quite a while now? clearly you had cause to be concerned but have they all been allayed now?

chelsea5_2

See my latest thread. There may be an answer there! If you klnow any more then tell me?

TY