What will happen to my Pension if I join the Scheme?
- The effect of a salary exchange on your pension provision is dependent on the rules of your pension scheme.
CPS
Pension contributions are based on the notional salary and therefore would include any salary exchanged. The 'death in service' lump sum is four times the notional salary (three times the notional salary where the member joined or re-joined the CPS on or after 1 December 2009). As the maximum lump sum permitted by HMRC is four times taxable salary there may be circumstances where the lump sum death benefit is restricted.
USS
Pension contributions are based on notional salary and therefore would include any salary exchanged. The 'death in service' benefit is calculated at three times notional salary and therefore would not normally be affected by the exchange. However, the HMRC rules only allow for four times taxable salary so there may be scenarios where the benefit on notional salary exceeds the maximum legally allowed.
- If you require further information about the impact of your pension deductions and entitlement please contact the Pensions Section. If you are using any other pension scheme you will need to check the implications of entering into a salary exchange scheme with your provider.