OMERS Pension Guide

Contributions

What are the contribution rates?

New joiners will be contractually enrolled on the following default contribution basis:

➢ Personal Contribution – 5% of your Basic Pensionable Salary. ➢ OMERS Matching Contribution – 5% of your Basic Pensionable Salary.

Basic Pensionable Salary is defined as your full basic salary excluding any bonuses, commissions or any other agreed remuneration .

Key Advantage No 1 - OMERS will match Personal Contributions up to a maximum of 10% of Basic Pensionable Salary. This is a huge benefit for those where finances allow a higher personal contribution: ➢ If you choose to pay 6% of Basic Pensionable Salary, OMERS will pay 6%. ➢ If you choose to pay 7% of Basic Pensionable Salary, OMERS will pay 7%. ➢ If you choose to pay 8% of Basic Pensionable Salary, OMERS will pay 8%. ➢ If you choose to pay 9% of Basic Pensionable Salary, OMERS will pay 9%. ➢ If you choose to pay 10% of Basic Pensionable Salary, OMERS will pay 10%. ➢ If you choose to pay 11% (or more) of Basic Pensionable Salary, OMERS will pay 10% (the maximum match).

* Please note that the OMERS company contributions are subject to a cap of 50% of the prevailing HMRC Annual Contribution Allowance. This equates to £30,000 per year at present.

Key Advantage No 2 – OMERS operate the highly tax efficient ‘Salary Exchange’ method for the payment of your personal contributions. For full details, please refer to the Salary Exchange section of this Guide. But in short, increased tax savings are achieved, along with a generous OMERS boost of 15% to your Personal Contribution rate:

➢ If you elect to pay 5%, the actual amount invested will be 5.75%. ➢ If you elect to pay 10%, the actual amount invested will be 11.50%.

Clearly, the more you pay personally, the more benefit you will see from these two key advantages. All members should consider these aspects very carefully and set their contributions accordingly (taking into account your overall circumstances).

Can I pay additional personal contributions?

Yes, it makes very good sense to pay the maximum you can afford in excess of the minimum 5% rate. Clearly, the ‘OMERS matching’ aspect is highly attractive. But members should not stop at 10% - the efficiency of the Salary Exchange (with the generous OMERS ‘boost’) is compelling in many instances. Contributions can be paid up to the HMRC maximum Annual Allowance. This is up to 100% of salary with a cap of £60,000 per year (company contributions from OMERS count towards this allowance). HMRC place further limits on how much you can pay into your pension if your total annual earnings (from all sources) exceed £260,000. Please refer to the Tapered Annual Allowance section if you think you may be affected.

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