Does PensionsPlus

INTRODUCING PENSIONSPLUS (CONT)

USS The USS rules allow employees to make additional contributions into the ‘Investment Builder’ section of the scheme.

If you already pay additional contributions, and you would like these to be paid under PensionsPlus in order to benefit from the National Insurance saving, you will need to log on to ‘My USS ’ and follow the guidance to change your contribution so that it is paid under ‘salary sacrifice’. Please note that if you only pay a 1% contribution under the old ‘The Match’ option, these contributions will automatically be paid under PensionsPlus and therefore you do not need to take any action.

If you do not pay any additional contributions and wish to in future, you will need to elect to pay these contributions via ‘My USS ’. To also pay these contributions under PensionsPlus, and benefit from the National Insurance saving, follow the guidance online to pay these contributions under ‘salary sacrifice’.

SAUL The SAUL rules do not allow additional contributions to be made via PensionsPlus.

14 I wish to participate in PensionsPlus; what do I need to do?

PensionsPlus is open to everyone. You will either be automatically opted in to PensionsPlus from day one of employment provided you join either the USS or SAUL pension scheme (check your Conditions of Service for details) or you can apply to join. An opt-in form can be found on Staff Connect 3 .

If you have already opted-out in the current PensionsPlus year ie 1 February – 31 January, you can only re-join during the annual renewal window between 1-31 January unless you opted-out due to a Lifestyle event ( see Q21).

15 Are there drawbacks to PensionsPlus? There are some potential drawbacks for staff who wish to participate in PensionsPlus. a If you leave your pension scheme, participation in PensionsPlus may restrict your ability to obtain a refund of your pension contributions. b PensionsPlus may affect the outcome of any application you make to borrow money (eg credit cards, mortgages). c PensionsPlus can reduce some statutory payments (such as maternity, paternity and adoption) you may receive.

Further information on each of these scenarios is outlined in the next three FAQs. If, after reading this, you wish to opt-out of participating in PensionsPlus, then you can do so by completing the opt-out form on Staff Connect 3 . Please note that if you choose to opt-out, you will not be able to participate again until the anniversary date, 1 February the following year.

3 Using the Google Chrome Browser

16 How does PensionsPlus affect my ability to obtain a refund of pension contributions on leaving a scheme? The refund available depends on how long you have been in the pension scheme.

If you leave the pension scheme within three months of joining and you are a member of PensionsPlus, then the University will refund to you an amount equal to that which you exchanged for an additional University contribution. This payment will be subject to any necessary deductions, such as tax and National Insurance. In other words, you will be put back into the same position as if you had never joined the pension scheme.

If you leave the pension scheme after three months but before being a member for two years, then under PensionsPlus no refund is available. This is because PensionsPlus is a salary exchange arrangement in which all contributions have been made by the University and none are made by the employee.

If you leave the pension scheme after 24 months of joining then you are not entitled to a refund of the member contributions regardless of whether you participate in PensionsPlus.

Please note that under the rules of the SAUL and USS pension schemes, members who anticipate obtaining a refund of pension contributions during the first two years’ of membership may wish to opt out of PensionsPlus in order to retain this flexibility. To remain a member of the pension scheme but opt out of PensionsPlus, visit Staff Connect 3

17 How does PensionsPlus affect my ability to obtain loans? PensionsPlus is unlikely to affect any loan applications you make, but the position will vary from lender to lender.

Generally lenders are beginning to place more emphasis on net pay, however, if the University is asked to provide a reference to a lender then your ‘Reference Salary’ (eg before the salary reduction associated with PensionsPlus) will be quoted. Your payslip will also continue to show your ‘Reference Salary’ ( see Q4). This should mean that PensionsPlus does not adversely impact on your application.

18 How does PensionsPlus affect statutory payments? Some statutory payments such as Maternity, Paternity and Adoption pay are linked to the amount of income that you pay National Insurance Contributions on. By being in PensionsPlus you are exchanging your pension contribution for an additional employer contribution, which reduces the amount of income that you pay National Insurance on. This will mean that the salary used to calculate your income will be lower which can affect the amount of any statutory payments you receive.

INTRODUCING PENSIONSPLUS (CONT)

19 What is HMRC’s view of PensionsPlus? HMRC’s current view of PensionsPlus is generally positive. However if that view were to change then the University may look to alter how pensions contributions are made.

By way of background, in April 2017 the Government introduced new rules which limited tax and National Insurance Contribution savings associated with certain salary exchange arrangements, however pension arrangements were specifically excluded from these changes.

20 Do other universities offer PensionsPlus? Many universities offer PensionsPlus (or an equivalent of it) to their employees. A small selection of these are listed below. • Oxford, Cambridge, UCL, LSE, Imperial, Warwick, Bristol, Birmingham, Bath, Exeter, Edinburgh, Manchester, Newcastle, Glasgow, Leeds, Liverpool, Nottingham, Southampton and York.

21 What if I subsequently decide to opt in/out of PensionsPlus? If you subsequently decide to opt in/out of PensionsPlus then you can do so during the annual renewal window (1-31 January) or by request on any of the following lifestyle events at any point in the year: • Marriage, civil partnership or change in employee status • Birth or adoption of a child • Change in dependents • Commencement of, or return

from, maternity/adoption leave • A significant change in working hours (20% or more) • Moving house • Academic leave of absence • Career break • Redundancy of a partner • Death of a partner or dependant • Divorce or separation • Commencement or return from long-term sick leave • Half/nil pay due to sickness

absence (wherein your salary falls below the National Minimum Wage 4 • Change in line with Pension Trust Deed and Scheme rules • Joining/leaving a pension scheme • Reaching annual/lifetime pension limits. The Pensions Team can provide guidance to anyone wishing to opt out before the anniversary date of 1 February due to a lifestyle event.

22 What happens to my PensionsPlus contributions if I am employed under multiple employment contracts? You will be opted in to PensionsPlus for any contract that qualifies ( see Q7 ) but can choose to opt out.

If you decide to opt out of PensionsPlus contributions for one employment contract, you will be opting out of PensionsPlus contributions for all employment contracts. If you have any concerns or specific questions regarding this, please contact the Pensions Team at pensions@kent.ac.uk

4 The National Minimum or Living Wage rate varies with age and changes every year. Please visit GOV.UK for current rates.

23 What happens if I

cease to make pension contributions to SAUL or USS? Ceasing to make any pension contributions will mean that you cease to make contributions through PensionsPlus.

24 If I participate in PensionsPlus, how will my payslip change? Your payslip will change in the following ways: • A new negative pay item will appear on the left-hand side of your payslip. For SAUL, the description will be, ‘SAUL CRB PP’ and for USS, ‘USS CRB PP’. • A reduction in the National

Insurance Contributions you pay; and • An increase in your net pay

25 How can I obtain

information about my total pension contributions? Information about your pension is issued annually by USS and SAUL in the form of an Annual Statement issued via the University.

• The Year to Date contribution figure will be zero as your pension contribution is now paid by the University.

Please note that: • If, for any reason, your earnings

in the month fall below the Lower Earnings Limit or if the salary exchange might lower your hourly pay below the National Minimum or Living Wage, for that period, you will pay your pension contribution as you currently do. This is to ensure that your State benefits are unaffected and that minimum earnings are maintained.

In this case, the deduction will show on the right hand side of the payslip. The pension code description will still end in ‘PP’ as you will remain a member of PensionsPlus but you will not receive the National Insurance Contributions saving in that month.

26 How does PensionsPlus interact with arrangements such as childcare vouchers and cycle to work?

PensionsPlus, the workplace nursery scheme, childcare vouchers 5 and cycle to work all use a salary exchange. They all involve you exchanging salary in return for a non-cash benefit from the University.

If your PensionsPlus, workplace nursery costs, childcare vouchers or cycle to work arrangements cause your earnings to either fall below the Lower Earnings Limit threshold or the National Minimum or Living Wage, then contributions are removed from salary exchange using the following prioritisation order: a PensionsPlus b Childcare vouchers c Workplace nursery d Cycle to Work scheme

This means that you would be removed from PensionsPlus first.

INTRODUCING PENSIONSPLUS (CONT)

27 What happens to PensionsPlus if I am only receiving statutory pay (maternity, paternity or adoption)? PensionsPlus will continue to operate if you are only receiving statutory pay. Student loan deductions are based on the amount of income that you pay National Insurance Contributions on. As PensionsPlus reduces the amount of income that you pay National Insurance Contributions on, your student loan deduction will also reduce; any change is likely to be very small.

In order to continue operating PensionsPlus when you are only receiving statutory pay the University will top up your pay so that, after the PensionsPlus reduction equal to your pension contribution, you still receive the statutory amount.

PensionsPlus will operate as normal when you return to work and receive more than statutory pay.

28 What will happen if I am on unpaid leave? PensionsPlus will cease to operate.

PensionsPlus will operate as normal when you return to work and receive pay.

29 How does PensionsPlus interact with student loan deductions? What if I have to pay student loan deductions? PensionsPlus will slightly reduce the amount of student loan deduction.

30 How does PensionsPlus interact with Attachment of Earnings Orders (AEOs)? The interaction between PensionsPlus and AEOs depends on the type of order. (AEOs are a way for the Courts to collect a debt you owe from your employer).

If the AEO is a fixed amount then it is unlikely to change after PensionsPlus is implemented.

If the AEO is based on net pay then the payment under the AEO is likely to increase slightly after PensionsPlus is implemented. This is because your net pay is higher under PensionsPlus.

If you are subject to an AEO then you are advised to seek independent legal advice.

31 How does PensionsPlus interact with my entitlement to Tax Credits? PensionsPlus does not change your entitlement to Tax Credits. Tax Credits are based on the amount of income that you pay tax on. As in Q8, PensionsPlus does not change the amount of income that you pay tax on, it follows that PensionsPlus does not change your entitlement to Tax Credits.

32 How do I opt in? If you are not opted in to PensionsPlus on commencement of employment, you can opt in using Staff Connect if: • You elect to join either SAUL or USS • During the annual renewal window each year between 1-31 January • If you previously opted out due to a Lifestyle event (see Q21)

Please refer to Q7 and Q15 for more information.

33 How do I opt out? You can opt out of participating in the PensionsPlus by completing the opt-out form on Staff Connect.

You may only opt out: • During the annual renewal

window each year between 1-31 January • as the result of a lifestyle event ( see Q21) • during the first three months of pension scheme membership

34 How does PensionsPlus impact on the annual and lifetime allowances? PensionsPlus does not impact on your annual and lifetime allowance.

The rules around the annual and lifetime allowance do not draw any distinction between your contributions and those made by the University. Under PensionsPlus the total amount paid into your pension does not change

It is nonetheless important that, if the contributions into your pension are in excess of these allowances, you seek appropriate advice.

35 Who can I ask if I have questions on PensionsPlus? You are advised to seek independent financial advice if you require further guidance on how PensionsPlus could impact you. This service may come at a cost so we suggest asking your financial adviser for a quote first.

For general questions please contact pensions@kent.ac.uk

FURTHER INFORMATION

Please visit www.kent.ac.uk/humanresources/pensions/pensionsplus.html or email pensionsplus@kent.ac.uk