Jon Everard Head of Payroll

1
Jon EverardHead of Payroll Pension
Servicesj.everard_at_ucl.ac.uk0207 679 1284
2
Salary Exchange PensionsSalary Overpayments
3
Salary exchange - Pensions

• What is it?
• Why are we doing it?
• When are we doing it?
• Who will it apply to?

4
Salary exchange - Pensions What is it?

• It is a salary sacrifice scheme akin to child
  care vouchers
• Employer will pay the pension contribution on
  behalf of the employee with the employees gross
  pay reduced by the amount of the pension
  contribution
• Employees overall pay will therefore be subject
  to less tax and national insurance contributions
• Pension contributions were already subject to tax
  relief (tax is assessed after the contributions
  paid) so further savings for employee now being
  made on NI contributions
• Savings of upto 200pa in net pay for someone on
  30,000

5
(No Transcript)
6
Salary exchange PensionsWhy are we doing it?

• Cost of pension provision is increasing with USS
  employer rate expected to increase by 2 next
  year. This increase alone will cost UCL in excess
  of 2M per annum
• Salary exchange will bring savings to employees
  take home pay without affecting their pension
  benefits
• UCL will save money on employer national
  insurance costs

7
Salary exchange PensionsWhen are we doing it?

• Discussions and agreement on implementation
  reached with Unions with their involvement on
  Implementation Group
• Implement with effect from April 2009 salary
• Communications begin December 2008
• Individual notification to all employees in
  February 2009

8
Salary exchange PensionsWho will it affect?

• Assumption that all employees are opted into the
  scheme and therefore have their pay reduced by
  the amount of pension contribution paid by the
  employer, where they are a member of the USS or
  SAUL pension schemes. Will not apply to NHS
  scheme members
• Not beneficial for some employees i.e. being paid
  less than LEL, contracted for less than 2 years
• Employees to whom not beneficial will continue to
  pay pension contributions and notified
  accordingly.

9
Salary overpayments

• What are the reasons for them happening?
• What can we do to stop them happening?
• What changes are UCL having to make going forward
  on overpayments to employees who have left

10
Salary overpayments What are the reasons for
them happening?

• Late notifications of employee having left
  employment
• Late or no notification of change of circumstance
  (reduction in hours)
• Incorrect notifications
• Employees not returning to work from maternity
  leave
• No notification of sickness

11
Salary overpayments What can we do to stop them
happening?

• Payroll can recall the pay of an employee upto
  noon of the day before payday. Ring your payroll
  contact and advise them that youve got a late
  notification of a employee leaving and they will
  ensure the correct pay is applied to the employee
  
• Get all notifications of employees change of
  circumstances in by the deadline. If you cant
  and you suspect that it will cause an
  overpayment, ring your payroll contact and advise
  them.
• Ensure that every day of an employees absence due
  to sickness is entered on MyView. This will
  ensure we correctly reduce pay to half or nil pay
  if sickness is long term and ensure employees are
  correctly paid Statutory Sick Pay
• Understand that employees not returning from
  maternity leave is an unknown but the earlier we
  are advised the easier it is to get back any
  monies that have been overpaid

12
Salary overpayments

• In last 12 months there has been 100 overpayments
  to leavers (reason 20 HR, 14 employee, 66
  departmental) amounting to over 100K
• Including active employees there have been 179
  overpayments amounting to 260K
• Current processes at UCL involve the reversal
  through payroll of any overpayment to an employee
  who has left with the department being credited
  with the overpayment and the net debt being
  recouped via a central bucket account. This
  does not conform to HMRC requirements and needs
  to be changed.
• From today any new debt of a leaver will only be
  credited back to a department once it is repaid
  by the individual. On complete repayment by the
  individual we will then claim back the tax and NI
  from HMRC and further reimburse the department
  this amount