OMERS Pension Guide

STIP Allocation (Bonus Exchange)

Short Term Incentive Plan (STIP) Allocation Exchange (hereafter referred to as Bonus Exchange) gives you the opportunity to enhance Pension benefits in a highly tax efficient manner. If you receive a STIP award and you are an active member of the Aviva Workplace Pension Plan, you may elect to receive part or all of that STIP award as a contribution to your Pension. Bonus Exchange (sometimes known as Bonus Sacrifice) supports the Salary Exchange Plan. It is a highly tax efficient way to boost your retirement savings. Many of the previous notes on Salary Exchange equally apply.

What is the Bonus Exchange?

Quite simply, it is an arrangement where you may exchange all or part of your Bonus in return for a pension contribution payable by your employer. This normally generates a substantial tax saving.

Who is eligible to participate?

If you are a member of the Aviva Workplace Pension and you receive a STIP award, you are eligible to participate.

Participation in the Bonus Exchange Plan may not be appropriate for all employees and whether to participate or not will depend on your own individual circumstances.

Additional Enhancement for the OMERS Bonus Exchange

As a special feature, OMERS will generously increase any Bonus Exchange by 15% (please note that this enhancement can be changed at any time and at OMERS discretion). This is in addition to all other tax savings that you are entitled to – many employers offer no such enhancement.

Please use the Exchange Calculator (located on your intranet site or by contacting JMA) to see personalised tax savings on the level of Exchange you wish to consider.

As a very simple example, if you decide to Exchange a pre-tax Bonus of £1,000, you will see £1,150 added to your Aviva Pension.

Please note that this enhancement only applies to participants of the Bonus Exchange Plan – Bonus taken as cash through payroll will not be enhanced under any circumstances.

For those that currently contribute less than 10% of salary towards the Pension monthly, you are entitled to a further enhancement if you participate in Bonus Exchange. If so, this option becomes utterly compelling. Please see the later question ‘What about Employer Matching’ for full details. However, if you already pay 10% of salary (or more) monthly, you are already receiving the maximum Employer Match on a routine basis – and nothing more can be claimed.

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