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Pensions



Our occupational pension schemes provide a valuable benefit to employees and all eligible staff are automatically enrolled into one of the University's occupational pension schemes at appointment.

  • Teachers' Pension Scheme (TPS)
  • West Yorkshire Pension Fund (WYPF)
  • Universities Superannuation Scheme (USS)
Need advice? Contact The Pensions Advisory Service, an independent voluntary organisation which provides free information about pensions.

Pensions

Plus Icon Automatic Re-enrolment
Automatic enrolment is a government initiative to encourage more people to save for their retirement. In July 2016 it is necessary for us to re-enrol some colleagues that have previously chosen to opt out back into a workplace pension scheme.

Further information about whether or not this affects you is contained in the briefing note below.

Plus Icon 8 Good reasons to be in our Occupational Pension Schemes
  • We make contributions on your behalf.
  • You get tax relief on all your contributions even on extra payments you make to top up your benefits.
  • No hidden fees or charges - you simply pay a percentage of your pay.
  • No investment risk – you get a guaranteed package of benefits that are backed by law.
  • Pensions for your dependents if you die.
  • Life cover of 3 years’ pay from the moment you join and, unlike other forms of life insurance, there’s no medical; it's open to all.
  • You can take a tax free lump sum as part of your pension benefits package.
  • Protection in case you have to draw your benefits early through ill-health.
Plus Icon State Pension and the Ending of National Insurance Contracting Out
National Insurance Contributions

With effect from 6 April 2016 our occupational pension schemes (LGPS/WYPF, TPS, USS) will no longer be contracted out of the additional state pension and so the rate of National Insurance you pay will increase by 1.4%. Based on current rates of National Insurance (which may change), the table below gives examples of the likely (net) reduction in your annual and monthly pay. The actual impact on your net (take home) pay will also be affected by other changes in April 2016 such as annual increases in tax allowances.

Annual

Gross Pay

Estimated NI Increase

(Annual)

Estimated NI Increase

(Monthly)

£8,064 £0.00 £0.00
£10,000 £48.55 £4.05
£15,000 £113.65 £9.47
£20,000 £178.75 £14.90
£25,000 £243.85 £20.32
£30,000 £308.95 £25.75
£35,000 £374.05 £31.17
£40,000 £439.15 £36.60
£45,000+ £478.92 £39.91

The examples assume you are over 21 years old (and below the state pension age), are based on the current NI thresholds (2015/16) and have been calculated using the HMRC NI calculator which can be accessed here.

If you are a LGPS member you can also use the contributions calculator using this link. This calculates the National Insurance rebate you are currently receiving which from 6 April 2016 will no longer be applicable.

State Pension Changes

The current State Pension is made up of two parts, the basic State Pension and the additional State Pension. The pension schemes that we use are currently ‘contracted out’ of the additional State Pension. This means that you pay National Insurance at a lower rate and build up pension in the contracted-out schemes (ie LGPS/WYPF, TPS, USS) rather than the additional State Pension.

From 6 April 2016, there will be a new State Pension for people reaching State Pension age on or after this date which will no longer have two parts. When the new State Pension is introduced it will replace the existing basic and additional State Pension, ending the option of contracting-out and the lower National Insurance rate you pay as a result.

Although you will pay more in National Insurance contributions, you are likely to get a bigger State Pension as a result of the changes.

State Pension Benefits

You can find out more about the new State Pension and how you will be affected on the Department for Work & Pensions (DWP) website using this link insert hyperlink https://www.gov.uk/yourstatepension including the impact on the pension payable as a result of having previously been a member of a pension scheme that was contracted-out.

If you’re aged 55 or over you can also now get a personalised State Pension statement based on your work history and National Insurance contributions to date. The statements will include information on deductions applied in respect of periods of contracted-out employment.

You will be aware that the state pension age has increased and you can use the State Pension Age Calculator to work out when your state pension will become payable.

As part of the drive to help explain State Pension reform, the DWP have published a website containing eight things you need to know about pensions which contains lots of useful information and links to the various State Pension tools.

Plus Icon Guidance on Pensions Tax
Pensions tax is a complex matter that mainly affects high earners. A number of legislative changes are taking place that put further restrictions on the level of benefits that can be provided on a tax-efficient basis in our pension schemes and the annual rate at which these benefits can accrue. The staff briefing which can be accessed on the right of this page has been developed by Mercer to help our staff better understand the changes.
Plus Icon WYPF Changes

WYPF have amended the pay bands used to determine employee contribution rates as from 1 April 2015. These are based on members’ actual pensionable pay including any overtime. Our employer contributions remain as 11.8% of your pensionable pay. To find out what these changes mean for you, please view the members' area of the WYPF website How Much Do I Pay?

WYPF Employee Contribution Rates From 1 April 2015:

Pay Contribution Rate You Pay
up to £13,600 5.5%
£13,601 to £21,200 5.8%
£21,201 to £34,400 6.5%
£34,401 to £43,500 6.8%
£43,501 to £60,700 8.5%
£60,701 to £86,000 9.9%
£86,001 to £101,200 10.5%
£101,201 to £151,800 11.4%
£151,801 or more 12.5%
Plus Icon TPS Changes

Career Average Scheme

On 1 April 2015, the Teachers’ Pension Scheme changed from a Final Salary Scheme to a Career Average Revalued Benefits Scheme. In the new scheme, pension benefits will be accrued based on members’ annual earnings (at a rate of 1/57th each year), and not on their length of service and final salary, and the normal retirement age will be equal to members’ state pension age. There are also a number of new flexibilities which allow you to increase your pension benefits.

For all members, any pension accrued up to 31 March 2015 will remain in the Final Salary Scheme. There are additional protections for those who were active members and between 10 and 13.5 years of their normal retirement age on 1 April 2012 (Tapered Members), meaning that they will stay in the Final Salary Scheme for a longer period before joining Career Average. Active members within 10 years of normal retirement age on the same date (Protected Members) will remain in Final Salary until retirement. All other members will join the Career Average Scheme on 1 April 2015. For further details about the changes, please see our Teachers’ Pension Scheme Employee Guide, or visit the scheme website.

Contribution Rates

Employee contribution rates and pay bands for the financial year 2015-16 have changed as from 1 April 2015. The rates are now based on members’ actual pay each year, rather than their full-time equivalent salary, and this will result in a change in employee contributions for most staff. Our employer contributions remain at 14.1% of your pensionable pay, and will rise to 16.48% from 1 September 2015. To find out what this means for you, please visit the TPS website and explore their calculator to calculate your monthly contributions before and after tax.

TPS Employee Contribution Rates From 1 April 2015:

Pay Band
Full-Time Equivalent Earnings
Contribution Rate You Pay
up to £25,999 7.4%
£26,000 to £34,999 8.6%
£35,000 to £41,499 9,6%
£41,500 to £54,999 10.2%
£55,000 to £74,999 11.3%
£75,000 or more 11.7%
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