Pension salary exchange is a simple way to save money with benefits for both employers and employees
Whether you are looking to reduce costs, provide extra benefits for your employees, or help attract and retain talent, an effective salary exchange scheme can help.
Through a pension salary exchange arrangement, employees exchange salary for direct pension contributions, reducing their salary by the amount of the pension contribution. This means that both employer and employee pay less in national insurance contributions (NICs).
Employers may retain ALL, SOME or NONE of their savings in NICs. Employers may use these savings to pay additional pension contributions to enhance employees’ pensions or fund other employee benefits.
Despite the Chancellor reversing the NIC rise for both employers and employees, NICs remains a significant cost, which means the benefits of salary exchange remain strong. It is a valuable savings tool that all employers and employees should be taking up.
How we set up pension salary exchange programmes
Moore Kingston Smith has the expertise to implement your pension salary exchange programme through the following suite of services:
Stage 1: education
Educating your employees on the benefits of salary exchange is crucial to ensuring successful implementation and maximising employee take up. The more employees that participate, the larger the savings. We provide you with detailed guidance, presentations and Q&As for both employer and employee on how salary exchange works.
Stage 2: implementation
Organisations may seek to automate the salary exchange implementation process. This is particularly necessary where large numbers of staff participate and you have inadequate resource to implement the scheme in-house. Moore Kingston Smith has partnered with Husky, the workplace pension specialist to offer a fully outsourced implementation solution.. Further information is available here.
Or
For organisations who prefer to implement salary exchange wholly in-house we offer a ‘do-it-yourself’ guide and the necessary documents to enable you to successfully implement a salary exchange pension scheme in-house, supported by our employment tax, financial and HR experts.
Contact our team
If you would like to find out how to make cost savings with pension salary exchange, please contact us at pensionsalaryexchange@mks.co.uk.
