1 / 18

The Star Group Pension Scheme Introducing Smart Pay

The Star Group Pension Scheme Introducing Smart Pay. Nigel Murdock Managing Director Torquil Clark Employee Benefits. Here Today. Who are we? Do you need to save for retirement? Advantages of saving in a pension plan Smart Pay v Direct Contributions Any risks?

xantara
Download Presentation

The Star Group Pension Scheme Introducing Smart Pay

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Star Group Pension Scheme Introducing Smart Pay

  2. Nigel Murdock Managing Director Torquil Clark Employee Benefits Here Today

  3. Who are we? Do you need to save for retirement? Advantages of saving in a pension plan Smart Pay v Direct Contributions Any risks? Scheme starts 1 May 2008 – how to join? Next steps Agenda

  4. Torquil Clark Holdings plc – Your Lifetime Financial Group Torquil Clark Financial Planning Torquil Clark Investments Torquil Clark Mortgages Torquil Clark Life Insurance Torquil Clark Insurance Services Torquil Clark Employee Benefits Introducing Torquil Clark

  5. Torquil Clark Employee Benefits • Established 1982 • Joined Torquil Clark Group 2004 • Specialist Employee Benefit Consultants • Independent Employee Benefit Advisers to your employer • Regulated by the FSA • Communicate thoroughly to maximise understanding

  6. Do you need to save for retirement? 1974 Basic State Pension = 27% of National Average Earnings 2007 Basic State Pension = 15.7% of National Average Earnings

  7. Do you need to save for retirement?

  8. Your Contributions - Boosted by tax relief Your Fund - Accumulates free of most taxes Your Benefits at Retirement - Substantial tax free cash - Pension taxed as earned income Life Assurance - Tax free The Star Group Pension Scheme – benefit from an employer contribution and significantly lower costs than a private pension. Advantages of saving to a pension plan

  9. From 1 August 2007 all employees future pension benefits are on a Defined Contribution basis. Contributions paid by you and on your behalf by your employer are credited to your personal account in the scheme. Your retirement benefits will depend on the value of your personal account at retirement. So the more you invest in your pension the better your retirement income. The purpose of this meeting is to explain the option to increase the amount credited to your account at no cost to you. Smart Pay vs. Direct contributions

  10. Direct Contributions - deduction from your pay attracting tax relief (current method)or Smart Pay - a deduction attracting tax relief and national insurance savings. The same total contribution at lower cost. Smart Pay vs. Direct contributions

  11. Salary £25,000* – Contributions 5% Employee: 5% of Pay Smart Pay vs. Direct contributions Standard Contribution Salary Sacrifice Salary Sacrifice: 5.79% of Pay Salary deduction: Gross Contribution £1,250.00 £1,449.24 Tax Relief (20%) £250.00 Tax Relief (20%) £289.84 Reduction in NIC £159.40 Net Cost £1,000.00 Net Cost £1,000.00 Employer NI invested £115.93 Total Invested £1,250.00 Contribution Invested £1,565.17 An extra 25.22% * Tax at basic rate of 20%

  12. Salary £45,000* – Contributions 5% Employee: 5% of Pay Smart Pay vs. Direct contributions Standard Contribution Salary Sacrifice Salary Sacrifice: 5.08% of Pay Salary deduction: Gross Contribution £2,250.00 £2,288.02 Tax Relief (40%) £900.00 Tax Relief (40%) £915.21 Reduction in NIC £22.88 Net Cost £1,350.00 Net Cost £1,349.93 Employer NI invested £183.04 Total Invested £2,250.00 Contribution Invested £2,471.06 An extra 9.82% * Tax at higher rate of 40%

  13. We have been advising on “smart-pay” schemes for over 10 years. HM Revenue & Customs include details of how to operate salary sacrifice schemes on the website www.hmrc.gov.uk Salary sacrifice is available for other benefits (eg child care voucher scheme). If HMRC decided to change the “rules” members can opt out of smart pay – in the meantime extra contributions boost your pension fund. Employer pension contributions will be based on your contractual pay Any risks?

  14. Your pay reviews will be based on your contractual pay. Your rate of overtime and any other benefits will be based on your contractual pay. Financial status for mortgages, other loans and rent are based on your contractual pay. SSP & Maternity pay will be based on your contractual pay. State Second Pension will be lower if you earn less than the Upper Earnings Limit (2008/9 £40,040) – but extra 25% contribution produces a significantly better pension and increased flexibility (early retirement, tax free cash & type of pension). Your basic state pension is not affected. Any risks?

  15. Scheme starts 1 May 2008 – to join Using the “salary sacrifice calculator” complete the application Current contribution % salary sacrifice Total contribution

  16. If you wish to join must return the application Can opt-out of scheme once a year (unless leave service) Can opt-out of paying by “smart-pay” once a year Can you afford to pay more? Additional voluntary contributions can also be paid by “smart-pay”. Use the “salary sacrifice calculator” to work out the change in salary and the increased pension contribution What happens next?

  17. Questions?

  18. This presentation has been prepared by P S Employee Benefits Ltd T/A Torquil Clark Employee Benefits P S Employee Benefits Ltd is authorised and regulated by the Financial Services Authority. It is intended through this presentation to provide additional information regarding the option to pay contributions through smart pay. Please also refer to the announcement issued to members on 20 March 2008. You must make up your own mind based on the information supplied. If you are in any doubt or need further clarification regarding your own financial situation you should obtain independent financial advice. The information contained in the presentation is based on our understanding of current legislation and practice. We are unable to anticipate changes in law. Other Important Information

More Related