PensionPlus USS Presentation By Jenny Casey & Ben Hancock Pensions Payroll

PensionPlus What is PensionPlus? Why is LSE introducing PensionPlus? Who else has introduced it? How does PensionPlus work? Pay Advice changes What are the benefits? Is PensionPlus for me? Participation Where can I find out more details? Questions?

What is PensionPlus? At present, your pension contributions are tax efficient. Under PensionPlus the total employee and employer contributions will be paid to USS by the School. NIC Savings for the employee and School At present AVCs will not be included.

Why is LSE introducing PensionPlus? USS have changed their rules. The LSE believes that this will be advantageous to employees to maximise their take home pay by a reduction in their National Insurance contributions. The School will also benefit from lower National Insurance costs.

Consultants PricewaterhouseCoopers (PWC). Why PWC? PWC will seek HMRC approval which will enable us to go ahead with the scheme in July 2009.

Other Institutions who have implemented their own versions of PensionPlus: Oxford USS Ltd University of Exeter University of Southampton University of Birmingham Imperial College London University of London Senate House

How does PensionPlus work? Your current employee pension deduction will be reduced to nil. The School will then pay an increased payment to the Pension Company made up of your contribution along with the standard employer contribution. Your total pay each month will be reduced by an amount equivalent to your original pension contribution.

Member EmployerScheme PAY Member contribution Employer contribution Existing Arrangement

New Arrangement under PensionPlus Member EmployerScheme Pays reduced salary Member contribution Employer contribution

Changes to your Pay Advice

Pre-PensionPlus (Current):

With PensionPlus:

What are the benefits? Your take home pay will increase. The School will make a saving.

Annual National Insurance Savings Annual SalaryAnnual Employee NIC saving £15,000£89.54 £20,000£ £25,000£ £30,000£ £35,000£ £40,000£ £45,000£ £50,000£31.75 £55,000£34.93 £60,000£38.10

Will PensionPlus reduce my pension benefits? No Your full pensionable salary will be unchanged. Retirement calculations will still use the full pensionable salary. Death in service lump sum payments will be calculated on the full pensionable salary.

When PensionPlus may not be advantageous to you Members with 2 years or less pensionable service who wish to leave the scheme.

What happens to my contributions? Your contributions can either: a) be used to transfer to another scheme after leaving. b) be used in the calculation of benefits at retirement age.

What if I do not wish to participate in PensionPlus? You do not need to participate in PensionPlus as it is not compulsory, however the School initially intends to enter all USS members into PensionPlus. If you decide to opt out of PensionPlus then your current pension arrangements will continue as before.

Can I opt back into the scheme? Yes you will be able to opt back into PensionPlus but only on the anniversary date of PensionPlus which will be 1 July on each year.

Where can I find out more details? Information booklet. School website under HR or Pensions. Power Point Slides.

Questions?