OMERS Pension Guide

ie Cash in Lieu Allowance

wance Program Overview

To help individuals genuinely impacted by the TAA, OMERS offers the Cash In Lieu Allowance (CIL).

An individual should carefully check to see if they are impacted by the TAA. It is important to remember that standard pension membership is most likely to be the best of the available options. Only if standard pension membership is negatively impacted by the TAA can an individual consider applying for the CIL. Rules are in place to prevent non-essential requests for participation.

How Does CIL Work and What Are the Rules of Participation?

TAA Impacted Individuals

➢ The key objective is to help individuals facing sufficiently restricted annual pension contribution allowances (because of the TAA). ➢ For qualifying individuals, the OMERS employer contribution allocation will be 10% of your Basic Pensionable Basic Salary. ➢ For individuals that qualify for (and opt-in to) CIL, the OMERS employer pension contributions continue at the minimum level. This is £10,000 per year (the amount of pension contribution that can be paid, no matter how severely an individual is impacted by the TAA). A CIL allowance (pre deductions) provides the remainder of the entitlement. ➢ For maximum payroll simplicity and ease of operation, there will be no mandatory personal contribution. The minimum £10,000 annual contribution allowance will be used in full by OMERS. Employer contributions are optimised with the CIL Allowance. ➢ For individuals who are only partially affected by the TAA (where standard pension contributions are still within the partially tapered allowance or where sufficient carry forward allowance remains to justify full pension membership for at least another year), CIL should not be selected (you can elect to switch to CIL at a subsequent review point). ➢ Individuals with total taxable income of £260,000 or greater can request to participate in the CIL Allowance. ➢ The CIL allowance: • Qualifying participants in CIL will receive a flat rate OMERS employer pension contribution of £833.33 per month (equivalent to £10,000 per year – using up the entire minimum TAA). • Zero mandatory employee pension contributions. • CIL monthly allowance payment equivalent to the OMERS employer pension contribution entitlement that exceeds £10,000 per year. ➢ The CIL allowance payment will be reduced by 15% to take into account the current level of corporate National Insurance OMERS must pay on this type of allowance (i.e. cash payment). Please note that if the rate of corporate National Insurance changes, this deduction will change accordingly. ➢ The CIL allowance payment will be subject to personal National Insurance and income tax in the normal way (the same as basic salary). ➢ Examples of how the CIL allowance works in practice are shown on the following pages.

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