1. Salary Sacrifice Pension Contributions USS and SAUL

2. What is Salary Sacrifice for Pension Contributions? SAUL and USS have introduced changes to their scheme rules to enable institutions to introduce salary exchange for pension contributionsSAUL and USS have introduced changes to their scheme rules to enable institutions to introduce salary exchange for pension contributions USS have themselves introduced salary exchange for pension contributions from September 2007 for their own staffUSS have themselves introduced salary exchange for pension contributions from September 2007 for their own staff 46 HEIs have implemented similar arrangements46 HEIs have implemented similar arrangements The School is intending to introduce Salary Exchange for Pension Contributions for USS and SAUL members from 1 July 2009The School is intending to introduce Salary Exchange for Pension Contributions for USS and SAUL members from 1 July 2009 SOAS

3. How it works Presently your pension contributions are paid before tax, directly into SAUL or USS.Presently your pension contributions are paid before tax, directly into SAUL or USS. From 1 July 2009, the School is proposing that this will change.From 1 July 2009, the School is proposing that this will change. Instead of making monthly pension contributions, you agree to give up an amount of your contractual gross pay equal to your pension contributions.Instead of making monthly pension contributions, you agree to give up an amount of your contractual gross pay equal to your pension contributions. In return, the School increases its contributions to the pension schemes by the same amount.In return, the School increases its contributions to the pension schemes by the same amount. SOAS

4. How it works Salary Exchange for Pension Contributions will not affect any other salary-related payments of benefits that you receive from the School, such as salary increases, bonuses and overtime. These will be based on your reference salary which is your annual salary before, Salary Exchange for Pension Contributions. Your pensionable salary will be based on your reference salary including any other earnings as recognised by USS or SAUL as pensionable.Salary Exchange for Pension Contributions will not affect any other salary-related payments of benefits that you receive from the School, such as salary increases, bonuses and overtime. These will be based on your reference salary which is your annual salary before, Salary Exchange for Pension Contributions. Your pensionable salary will be based on your reference salary including any other earnings as recognised by USS or SAUL as pensionable. Your reference salary will also be the amount used in any personal official letters issued by the School on your behalf e.g. mortgage letters, loan applications or job references etcYour reference salary will also be the amount used in any personal official letters issued by the School on your behalf e.g. mortgage letters, loan applications or job references etc SOAS

5. How it works For SAUL members You will no longer pay your 6% pension contributions directlyYou will no longer pay your 6% pension contributions directly Your contractual gross salary will be reduced by 6%Your contractual gross salary will be reduced by 6% For USS members You will no longer pay your 6.35% pension contributions directlyYou will no longer pay your 6.35% pension contributions directly Your contractual gross salary will be reduced by 6.35%Your contractual gross salary will be reduced by 6.35% SOAS

6. How it works In return the School will increase its contributions by an equivalent amount, which will be paid into the pension fundIn return the School will increase its contributions by an equivalent amount, which will be paid into the pension fund You will pay lower NI, increasing your take home payYou will pay lower NI, increasing your take home pay Your reference salary for all other benefits purposes is unchangedYour reference salary for all other benefits purposes is unchanged Your pension benefits are unchangedYour pension benefits are unchanged SOAS

7. How much will you save? Example 1 – SAUL Member Grade G6/AC1 Point 29 £30,973 (28,839 + 2134) Pre-Salary Exchange £ Post-Salary Exchange £ Basic Salary 30,973 Pre-exchange Salary 30,973 Less Pension Contributions1,858.38 Less Pension Exchange 1,858.38 Post-exchange Salary 29,114.62 Less Income Tax 4,612.80 4,612.80 Less NIC 2,388.36 2,213.64 Net Take Home Pay 22,113.46 22,288.18 The employees net take-home pay has increased by £174.72 per annum (£14.56 per month) SOAS

8. How much will you save? Example 2 – USS Member G8/AC3 Point 37 £38,666 (36,532 + 2134) Pre- Salary Exchange £ Post-Salary Exchange £ Basic Salary 38,666 Pre-exchange Salary 38,666 Less Pension Contributions2,455.29 Less Pension Exchange 2,455.29 Post-exchange Salary 36,210.71 Less Income Tax 6,033.60 6,033.60 Less NIC 3,111.48 2,880.72 Net Take Home Pay 27,065.63 27,296.39 The employees net take-home pay has increased by £230.76 per annum (£19.23 per month) SOAS

9. How much will you save? The employee and employer save National Insurance at their marginal rate of paymentThe employee and employer save National Insurance at their marginal rate of payment The majority of employees will save at 9.4% on the value of their pension contributionsThe majority of employees will save at 9.4% on the value of their pension contributions Staff whose earnings are less than £40,040 will save 9.4% on the value of their pension contributionStaff whose earnings are less than £40,040 will save 9.4% on the value of their pension contribution Staff whose earnings are between £40,040 and £43,875 will save 11% on the value of their pension contributionStaff whose earnings are between £40,040 and £43,875 will save 11% on the value of their pension contribution Staff whose earnings are above £43,875 will save 1% on the value of their pension contribution.Staff whose earnings are above £43,875 will save 1% on the value of their pension contribution. SOAS

10. Protecting your pay Members who wont benefit are protectedMembers who wont benefit are protected –If you earn less than £5,715 a year –Those whose pay falls below the National Minimum Wage (NMW) because of participating Your pension deductions will not change – everything stays the same as it was before Salary Exchange for Pension Contributions.Your pension deductions will not change – everything stays the same as it was before Salary Exchange for Pension Contributions. SOAS

11. Changes to your terms and conditions By participating in Salary Exchange for Pension Contributions you are agreeing to a change in your terms and conditions of employment with effect from 1 July 2009By participating in Salary Exchange for Pension Contributions you are agreeing to a change in your terms and conditions of employment with effect from 1 July 2009 If you do not wish to participate in Salary Exchange for Pension Contributions, you can opt-out by completing an opt-out form which you can get on request from the Payroll Office. The completed form must be received by 30 June 2009.If you do not wish to participate in Salary Exchange for Pension Contributions, you can opt-out by completing an opt-out form which you can get on request from the Payroll Office. The completed form must be received by 30 June 2009. SOAS

12. Changes to your terms and conditions If you decide to opt-out of Salary Exchange for Pension Contributions you will have the opportunity to review your decision and elect to participate in Salary Exchange for Pension Contributions with effect from 1 April 2010 and thereafter any subsequent 1 April.If you decide to opt-out of Salary Exchange for Pension Contributions you will have the opportunity to review your decision and elect to participate in Salary Exchange for Pension Contributions with effect from 1 April 2010 and thereafter any subsequent 1 April. You will be deemed to have accepted the change if you do not complete and return an opt-out form before 30 June 2009.You will be deemed to have accepted the change if you do not complete and return an opt-out form before 30 June 2009. SOAS

13. What happens next? The School has agreed to the introduction of Salary Exchange for Pension Contributions and has discussed it with the recognised trade unionsThe School has agreed to the introduction of Salary Exchange for Pension Contributions and has discussed it with the recognised trade unions From 1 July 2009, all existing pension members in both the USS and SAUL will be automatically enrolled in Salary Exchange for Pension Contributions unless you choose to opt-out, you earn less than £5,715 a year or your earnings fall below the National Minimum WageFrom 1 July 2009, all existing pension members in both the USS and SAUL will be automatically enrolled in Salary Exchange for Pension Contributions unless you choose to opt-out, you earn less than £5,715 a year or your earnings fall below the National Minimum Wage SOAS

14. Questions?