Hanson is joining many large businesses in the UK including British Energy, BAE Systems and Lafarge by offering all eligible employees the chance to save money through a salary exchange agreement known as Smart Pensions.
At present, employee pension contributions are taken from gross pay and although tax-free they are subject to National Insurance (NI) at 12 per cent (or two per cent for those with earnings over £41,450 a year).
The plan is for gross pay to be reduced by the value of current pension contributions, and for the company to make the payment instead. As a result, both employees and the company will pay less NI, and take-home pay will increase.
This salary exchange agreement has the full approval of HM Revenue and Customs.
In summary it means:
- You do not make any payments (including any additional voluntary contributions) directly into the Hanson Industrial Pension Scheme.
- Your basic pay is reduced by an amount equal to your pension contributions.
- The company pays your pension contributions direct to the scheme and you save the NI contribution.
There is a clear advantage to this change for the vast majority of people. However, some state benefits are based on earnings after salary exchange so if you are claiming such benefits, or unsure about any implications of the proposal, you should seek independent advice.
Full details of the Smart Pensions exchange arrangement have been sent to home addresses along with the terms and conditions. If you want to join, you do not need to respond - you will automatically be signed up from January 1, 2014. If you do not want to join, the information pack also contains an opt-out form.
- Find out how much you could save using the smart calculator (please note this will take you to Dropbox to download the file. You do not need to register with Dropbox to access this calculator)
Refer to links to documents in the right column of this page for further information