OMERS Pension Guide

Salary Exchange

Salary Exchange (sometimes known as Salary Sacrifice) is quite simply the most tax efficient way to pay your personal contributions towards the OMERS Workplace Pension.

What is Salary Exchange and how does it work?

Salary Exchange is simply a different, more tax efficient way of paying personal pension contributions. Instead of paying your contributions from net salary (the conventional method), your salary is reduced by the amount of your gross pension contribution. This amount is then paid into your pension as an additional company contribution (the ‘exchange’).

This results in the following benefits:

1. You pay less National Insurance personally and consequently, your monthly take home pay increases. 2. If you are a higher (or additional) rate tax-payer, you will see immediate tax relief at the full rate (no requirement to separately claim back the additional relief owed – easing your personal administration). 3. Most notably, you will receive a particularly generous OMERS ‘boost’ to your personal contribution rate. This is currently 15% (but may change in future based on any legislation amendments).

The higher the level of contribution you choose to make using Salary Exchange, the greater the savings become.

Why does OMERS offer Salary Exchange?

OMERS is absolutely committed to offering employees a market leading pension Plan. Salary Exchange is an efficient way of enhancing personal pension contributions.

How can I calculate my own contributions and tax savings?

A Salary Exchange calculator is provided for your use. This is available on the People Portal or by contacting JMA.

Do I have to pay my Pension Contributions using Salary Exchange?

The default option is Salary Exchange – this will apply in the absence of any other instructions. However, you can switch to the conventional method if you so wish. If you do so, you will miss out on the hugely valuable savings (and have the responsibility to reclaim higher rate tax relief if it applies to you).

Who is eligible to make Salary Exchange contributions?

You are eligible to make Salary Exchange contributions – if your post-exchange salary is greater than the prevailing National Minimum Wage.

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