PENSIONS & STAFF BENEFITS. Jill Nimmo - Pensions Manager

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1 School of something FACULTY OF OTHER PENSIONS & STAFF BENEFITS Jill Nimmo - Pensions Manager

2 Staff Benefits Core benefits holidays, maternity, paternity, adoption leave, sickness benefits, staff review & development scheme. Support services; HR, Library, etc. More details on HR website; Benefits+ Lifestyle+ Childcare+ Travel+ Pensions+ More details can be found on the staff benefits website;

3 Lifestyle+ Lifestyle+ access via to huge range of discounts See the main benefits website for further details; Deals on healthcare & accident insurance Simply Health Give as you earn Staff assistance fund Sports centre membership the Edge NUS student discount Card and many, many more..

4 Childcare+ Childcare+ Childcare vouchers via salary sacrifice scheme, so you make a saving on your tax & NI contributions on site nursery facilities Sports camp and holiday play schemes

5 Travel+ Travel+ Cycle to work scheme via salary sacrifice arrangement, so the cost to you of acquiring the cycle is reduced Metrocard, discount of 15% on annual card Train season tickets via interest free loan First Bus monthly travel pass from a month if you travel within Leeds Staff Benefits Fair held each year your chance to meet providers & ask questions

6 Pension Benefits What is automatic enrolment? What are the main pension schemes? When do I join? What benefits do they provide? What is Pensions+? Cost of pension scheme membership How can I increase my benefits?

7 What is automatic enrolment? This is a government initiative designed to increase levels of pension scheme membership The regulations apply to all staff joining the University As an employer, the University are required to automatically enrol all eligible members into a suitable pension scheme If you do not wish to be in a pension scheme at the University you can opt out Under automatic enrolment regulations, if you do opt out we will be required to opt you back in within the next 3 years Please see the pensions website for further detailed information;

8 Eligibility for automatic enrolment We will have to automatically enrol all staff, into the appropriate scheme for their grade, if they meet the following criteria; Not already in a qualifying workplace pension Contract for more than 3 months Age 22 or over Under state pension age Earning more than a minimum amount each month ( /16) Work or usually work in the UK

9 Main Pension Schemes The scheme you are eligible to join is dependent on your staff category and will be confirmed in your letter of appointment; Staff category Scheme Academic or Professional & Managerial grade Support staff USS Career Revalued Benefits (CRB) section or USS Final salary section if you were already a member prior to 1 October 2011 changes are being made to the USS scheme from 1 April 2016, which will impact on all members, see the USS website for further details; University of Leeds Defined Contribution Pension Plan (DC Plan) or University of Leeds Pension & Assurance Scheme (PAS) Career Average Revalued Benefits (CARE) section

10 When do I join? USS If eligible, you will automatically join the CRB section from the first day of your employment. You do not need to take any action. - If you are eligible for the final salary section, we have to wait for confirmation from USS before we can move you to this section NB the final salary section will be closing on 31 March 2016, all final salary members will join the CRB section DC Plan or PAS - You can opt to join one of these schemes from your first day of employment if you wish - By default, you will not join a scheme for the first 3 months of your employment - After 3 months, if you are eligible, you will automatically be enrolled into the DC Plan - You can opt to join PAS rather than the DC Plan, but must do so within 6 months of joining the University - Please contact the pensions department if you want to join immediately or if you wish to join PAS

11 Main Benefits : USS & PAS Both USS and PAS are defined benefit pension schemes. See website for further scheme specific details; You build up pension and tax free cash sum based on your salary in each year of membership Retirement at age 65 Once in payment, your pension increases in line with inflation (with a cap if inflation is more than 5% a year) Early retirement is available after age 55, but an early retirement reduction factor would apply Ill health early retirement benefits enhanced benefits payable if you are unable to work

12 Main Benefits USS & PAS Death in Service & Retirement Death in service; Tax free lump sum of 3 times pensionable salary payable on death in service under PAS & USS, plus Spouse s/dependants pension equivalent to half your pension projected to age 65 (maximum of 40 years service), plus Children s pensions Death in retirement; Spouse s/dependants pension equal to 50% of your pension Lump sum if you die within 5 years of retirement Remember to complete a nomination form & keep this up to date when family circumstances change

13 Main Benefits - DC Plan (1) (support staff only) This is a defined contribution (money purchase) arrangement Contributions from you and the University are invested to build up a pot of money for use on retirement The investment of contributions is administered by The People s Pension Minimum member contribution is 3% but you can pay more if you wish to You can vary your contributions at any time The University will broadly match member contributions on a 2 for 1 basis up to a maximum University contribution of 10% of pensionable salary You have a choice of funds to invest in, or there is a default option

14 Main Benefits - DC Plan (2) On retirement you can take up to 25% of the fund as tax free cash Balance of fund can be taken as cash, subject to a tax charge or used to provide income eg by purchasing a pension from an insurance company, using the fund built up from the contributions plus investment performance You have flexibility to decide on the type of pension you want, for example you can opt for a pension that increases once in payment, and specify the annual rate of increase If you are too ill to work, the DC plan will provide an income protection benefit of 50% of pensionable salary, subject to conditions On death in service a lump sum of 5 x pensionable salary is paid, plus your fund will be returned (currently) tax free or it can be used to set up a spouses pension Retirement guidance for those over 50 is available from the Pension Wise service;

15 What is Pensions+? Pensions+ is a more effective way of paying contributions, via what is known as a salary sacrifice scheme. You do not make a regular contribution to the pension scheme, University pays the contribution on your behalf together with the employer contributions Your contractual basic salary is reduced by amount equal to your contributions You pay less National Insurance so your net pay increases Level of saving will depend on salary level For more details please refer to the pensions+ booklet;

16 What is Pensions+ (cont) Pensions+ will not affect: Salary related benefits (eg allowances, shift pay, holiday pay, overtime, pay reviews, death benefits) Mortgage or other salary references Pension benefits or AVC contributions Maternity, paternity, adoptive pay Basic State Pension benefits You will be assumed to participate unless you opt out You can opt out of Pensions+ and still remain a member of the Pension Scheme Important note - if you join scheme under Pensions+ and you leave with less than 2 years service, you cannot have a refund of contributions. If you are likely to leave with less than 2 years service and think you might want the option of taking a refund, then you can opt out of Pensions+ and still remain in the pension scheme

17 Cost of pension scheme membership Scheme USS final salary section USS CRB & PAS CARE (1) Gross member contribution University contribution Net employee cost pensions+ (2) 7.5% (4) 16% 3.85% 4.65% 6.5% (4) 16% USS 18.15% PAS 3.5% 4.0% DC Plan 3 (3) 6% 2.04% 2.4% DC Plan 5% 10% 3.38% 3.9% Net employee cost Not in pensions+ (2) You automatically get tax relief at your highest rate on your contribution If in USS or PAS you also pay lower national insurance contributions (1) for USS joiners after 1 October 2011 & PAS joiners after (2) for basic rate tax payer (3)for support staff, lowest contribution rate 3%,you can pay more & University will pay double your contribution, up to a maximum University contribution of 10% (4) All USS member contributions will increase to 8% from 1 April 2016

18 How can I increase my benefits? Can pay Additional Voluntary Contributions (AVCs) to all schemes Suitable for members who can t achieve maximum benefits or who may wish to retire early Can buy extra pension benefits* (added benefits AVC) or build up separate money purchase fund Can pay monthly or by lump sum Tax efficient way to buy extra pension benefits -Tax relief granted at source e.g. contribution of 10 a month would cost 8.00 net of basic rate tax relief * USS only & time limited availability due to scheme changes

19 How can I increase my benefits? -Transfers In If you have previous company or personal pension scheme benefits; scheme PAS DC Plan USS final salary section benefit No transfers in allowed into PAS Can only transfer other DC benefits, not those from defined benefit scheme Under USS final salary section, transfer in will buy extra service (deadline of 30 October 2015 for making enquiry, see USS website for further details) USS CRB section Will provide extra pension & lump sum in the CRB section of USS (deadline of 30 September 2016 for making enquiry, see USS website) USS at previous institute automatic transfer of membership. If you were in the final salary section, able to rejoin this if it is within 30 months of previous leaving date USS both sections If previous scheme in public sector Transfer Club, need to investigate within 2 years of joining USS. Extra service credited To initiate a transfer enquiry, please submit a transfer enquiry form to the pensions department

20 Further information for Support Staff If eligible, remember you only have a one-off opportunity to join the CARE section of PAS Must make this decision within first 6 months of joining the University Otherwise DC Plan will be the default scheme A monthly pension induction course is run by the pensions department, to help new support staff make an informed choice as to which scheme they wish to join Dates of the induction course will be circulated by the pensions department along with automatic enrolment letter

21 Contacts pension queries; benefit queries ; staffbenefits@leeds.ac.uk Pension Office Contacts Jill Nimmo Pensions Manager ext Angela Jennings ext Nicola Waite ext Elizabeth Horne staff benefits ext Joanne Hubbard ext Julie Waddington ext Website -