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Durham University

Human Resources & Organisational Development

pensions+

The University operates a salary sacrifice arrangement, as referenced in your terms and conditions of employment.

Pension scheme members already receive income tax relief on pension contributions and the University is committed to making your pension contributions work even more efficiently. pensions+ means that both you and the University can make savings.

By agreeing to reduce your gross contractual salary by the value of your pension contributions, the amount both you and the University pay in National Insurance contributions reduces. As your NI contributions decrease, your take-home pay increases.

On joining DUPS or USS, members will automatically be opted into the Pensions+ arrangement, unless their salary is below the Pay Protection Limit as set by the University or they choose to opt out. Members of Aviva cannot participate in pensions+.

Before applying for pensions+, we strongly advise that you carefully read the Salary Sacrifice FAQs to ensure that you are eligible to apply and that you will benefit from the use of this scheme.

How it works

  • You do not pay your normal pension contributions directly
  • Your gross contractual salary will be reduced by a percentage, based on your pension contributions
  • In return, the University will increase its contributions by an equivalent amount, which will be paid into the pension fund
  • As your salary will be lower, you will pay lower NI contributions
  • Currently, Additional Voluntary Contributions are not included in pensions+ for Aviva or DUPS while they are available with the USS Investment Builder AVC's.

Your basic state pension will not be affected.

If you are unsure about whether or not you should participate in pensions+, you should seek your own financial advice. Details of an independent financial adviser (IFA) near you can be found by calling IFA Promotion Ltd on 0800 085 3250 or at: www.unbiased.co.uk.


FAQs

No. Your pension will not be affected and continues to be a valuable benefit to you.

The amount that you save will vary depending on your level of pay. The following table, effective from 1st August 2019, will give you a guide as to how much tax and NI you can expect to save by paying into a pension using Salary Sacrifice:

Pension Cost

Grade(effective from August 2019)

Annual salary (lowest spine point)

DUPS gross contribution (6.5%)

DUPS net contribution

Saving

USS gross contribution (9.6%)

USS net contribution

Saving

Grade 1

£17,046

£92.33

£62.78

£29.55

N/A

N/A

N/A

Grade 2

£17,361

£94.04

£63.95

£30.09

N/A

N/A

N/A

Grade 3

£17,682

£95.78

£65.13

£30.65

N/A

N/A

N/A

Grade 4

£19,612

£106.23

£72.21

£34.02

N/A

N/A

N/A

Grade 5

£22,417

£121.43

£82.58

£38.85

N/A

N/A

N/A

Grade 6

£26,715

N/A

N/A

N/A

£213.72

£145.33

£68.39

Grade 7

£33,797

N/A

N/A

N/A

£270.38

£183.86

£86.52

Grade 8

£41,526

N/A

N/A

N/A

£332.21

£225.90

£106.31

Grade 9

£52,560

N/A

N/A

N/A

£420.48

£264.59

£155.89

Gross contribution = Contribution before tax relief and NI saving from salary sacrifice, this is the amount on your payslip.

Net contribution = Estimated actual cost to members based on single persons tax allowance 2019/2020 .

The marginal rate of NI that you pay depends on how much you earn. For earnings above the Upper Earnings Limit (UEL), currently £42,360 a year (2015/16), the employee NI rate is 2%. If this rate increases in the future, then your opportunity to make savings will increase.