How do you pay for pensions?

Pension provision forms a significant part of the total reward package you offer your employees.

alpha, nuvos, premium, classic and classic plus schemes

The contributions you pay for members in these schemes are collectively known as Accruing Superannuation Liability Charges (ASLC).

Standard rates

How the ASLC rates and pay bands that you must use are set out.

Non-Standard ASLC rates

In some circumstances you may want to offer individual pension arrangements for a special or senior appointment.

Calculating the ASLC

A member’s permanent pensionable earnings are their basic salary and any other pensionable emoluments.

When service only covers part of the month

If service begins or ends with part of a month, your payroll must calculate the ASLC.

Pay arrears and calculating the ASLC

Pay arrears do not take a member into a higher salary band for the purpose of determining which ASLC percentage rate applies.

Calculating the ASLC where member is paid other than monthly

When a member is paid other than monthly - for example, every week - the ASLC calculation must be done at the end of each month.

partnership pension accounts – Employer contributions

Employer contributions to partnership pension accounts come in three parts.

partnership pension accounts – Employee contributions

Employee contributions are worked out before the deduction of basic rate tax is taken from the employee’s pay.

partnership pension accounts – Ongoing payroll action

Your payroll must follow the Legal & General ‘Manage Submissions Interface Guide’.

Paying contributions and the scheme limits

The limit to reckonable service under classic is 45 years in total.

Effect on contributions when a member is on secondment

You must clarify and agree with the member and with the borrowing employer which pension scheme the member belongs to before secondment begins.

National Insurance and pensions

The level of National Insurance employers and employees pay depends on how much the employee earns.

Changes to the Civil Service pensions’ structure

The Scheme Manager is responsible on behalf of the Civil Service Minister, for making any changes to the benefit structure of each of the schemes.

Annexes

Published:
21 December 2021
Last updated:
4 March 2022