Contributing to the Trust
If you are an Active Member of the Trust, your Employer may pay valuable contributions into your Personal Account, as set out in your Trust Benefit Summary. In addition, as an Active Member, you will also be able to contribute to your Personal Account.
The total contributions from both you and your Employer are paid to the Trust and invested in investment options chosen by you.
We recommend that you carefully consider the level of contributions you pay in order to adequately plan for your future. Valuable financial modelling tools are available via Your Account to assist you.
The Trust operates tax relief on employee contributions as a "net pay arrangement". Any contributions that you make will be deducted from your Pensionable Salary each month before your earnings are assessed for tax. This means that your contributions attract full tax relief at source at your highest marginal rate, as set out below. If your earnings are below the starting rate for income tax you will not benefit from the tax relief a taxpayer would receive. This does not affect the amount that is paid into your pension and you will continue to benefit from the money that your employer pays in. You should give careful consideration to how much you pay so that you benefit from any additional contributions that may be available from your Employer.
If your Pensionable Salary is £20,000 per annum and you elect to pay a contribution of 10% of your Pensionable Salary:
- Your contribution is £166.66 per month
- Your tax relief is £33.33 per month
(You actually pay £133.33 per month out of your take home pay, although the full £166.66 is invested on your behalf.)
In addition, your Employer may contribute an additional amount to your Personal Account. (These figures allow for basic rate tax, which is currently 20%.)
If your Pensionable Salary is £50,000 per annum and you elect to pay a contribution of 10% of your Pensionable Salary:
- Your contribution is £416.67 per month
- Your tax relief is £166.67 per month
(You actually pay £250.00 per month, out of your take home pay, although the full £416.67 is invested on your behalf.)
In addition, the Employer may contribute an additional amount to your Personal Account. (These figures allow for higher rate tax, which is currently 40%.)
Leaving the Trust early
If you joined the Trust before the 1st October 2015 and leave with less than two years’ Pensionable Service you can either claim a refund of contributions* or get a transfer value.
If you do not make a choice within three months of being notified of your options, you will automatically be given a refund of contributions. If your Personal Account at the date of leaving Pensionable Service is greater than an amount specified by the Trustees at that time, you may be given the option of leaving your Personal Account invested under the Trust and may continue to receive any investment growth applicable. If you leave early outside of these criteria, you can get a transfer value or continue with trust membership.
*If your contributions are via a Salary Sacrifice arrangement, then this option may not be available.
If you select this option, your transfer value would represent all the contributions that have been made by you and your Employer, including any investment gain (or loss). No early surrender penalty will apply.
If you select this option, you may leave your Personal Account invested under the Trust and may continue to receive any investment growth applicable. It will then be available for the purchase of benefits when you retire.
If you take this option, you will receive a refund of the value of your own contributions, including any investment gain (or loss). From this refund a tax liability, currently at 20%, will be deducted. If the refund exceeds £20,000 the excess will be taxed at 50%. You will then have no further entitlement to benefits under the Trust.
Absence from work
If you are absent from work but are in receipt of pay from your Employer you may continue to be an Active Member of the Trust, details of which will be provided to you by your Employer via your Trust Benefit Summary.