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PENSION PRODUCTS
GENERAL
Contributions by Salary Sacrifice (for employer sponsored arrangements)
In certain circumstances, it may be an advantage for a member to consider a ?salary sacrifice' arrangement i.e. he/she volunteers to give up part of his/her salary on the understanding that the ?sacrificed' part will instead be paid into the pension scheme.
The effect of salary sacrifice is:
Each time a salary sacrifice is to be implemented, a special letter should be sent to the member for signature and returned to you. The letter should be completed before the ?sacrificed' salary is actually earned, and be along the lines of:
Sample Letter
Mortgage Products
Legacy
Disclaimer
Pension Products
Contact
Protection Products
Investment Products
General
GENERAL
In certain circumstances, it may be an advantage for a member to consider a ?salary sacrifice' arrangement i.e. he/she volunteers to give up part of his/her salary on the understanding that the ?sacrificed' part will instead be paid into the pension scheme.
The effect of salary sacrifice is:
- the member does not receive the sacrificed salary so there's no tax to pay on the sacrificed bit;
- the member may also pay lower National Insurance contributions, depending on the salary level before and after the salary sacrifice;
- the Employer still treats the reduced salary and increased pension contribution as allowable expenses in its own taxation (so its tax position is unchanged);
- in addition, the Employer's National Insurance contributions will be reduced.
Each time a salary sacrifice is to be implemented, a special letter should be sent to the member for signature and returned to you. The letter should be completed before the ?sacrificed' salary is actually earned, and be along the lines of:
