With presenters from across Nest, the webinar included information on what salary sacrifice is, some tips for running your Nest accounts and understanding the legal perspective.

The presentations and Q&A are available now to watch and share with colleagues :

 

 

 

 

The slides from the webinar are available here.

Speakers :

  • John Hale – Head of B2B Technical and Strategic Partnerships
  • Gary Ball – Senior Technical Account Manager
  • Stuart Earle – Partner at Eversheds Sutherland

Hosted by David Knight – Head of Key Employer Account Management

Below are the unanswered questions from the webinar:

Question: Can you have different groups – qualifying earnings/ total earnings/ salary sacrifice? 

  • Answer: Yes

Question: If 5% is deducted from the employee’s salary, they end up ‘worse off’ than before. You said earlier that they shouldn’t be worse off? 

  • Answer: With salary sacrifice the 5% member contribution is deducted from their gross salary (prior to tax and NINO being deducted).

Question: Can you make an additional single contribution directly to Nest? And if so, will there be a top up from the government? 

  • Answer: Yes, single contributions can be paid to Nest (either as part of regular contribution or exception schedule).  For a relief at source (RAS) contribution we will claim 20% tax relief from HMRC after the contribution has been received.

Question: An employee has recently asked to contribute more, would salary sacrifice be a better option? 

  • Answer: This will depend on how you have set up your arrangement with your employees.  If it is done by salary sacrifice, then normally both the employee and employer currently save on National Insurance contributions.

Question: Is there a maximum amount an employee can salary sacrifice, i.e. can they go above the 8% mentioned? 

  • Answer: No there is no limit.  Individuals need to seek independent financial advise.

Question: If an employee is going on parental leave, are you saying the employer can force them out of the salary sacrifice arrangement? I had always thought the employer had to continue paying the full contribution, since it’s a non-cash benefit? 

  • Answer: Yes, this is often the case but subject to what you’ve agreed at the outset in the contract of employment. 

Question: If I change one employee to salary sacrifice does that mean that the employee pays no pension contribution but sacrifices say £200 per month 

  • Answer:  Yes, salary sacrifice, or salary exchange is an arrangement where an employee gives up part of their salary and in return the employer pays it into their pension pot as an employer contribution

Question: Sorry if this has already been asked or answered but is their a salary sacrifice calculator we can use to show each employee the savings they will get? 

  • Answer: At the moment we don’t offer a calculator to show the saving.  There are, however various calculators that can be found on-line.

Question: Can salary sacrifice be done on top of/alongside normal pension sacrifice? What I have seen online seems to suggests it can but, the advice here seems to suggest that if salary sacrifice is done then all pension contributions go through the salary sacrifice (so normal pension sacrifice must be stopped). 

  • Answer: A salary sacrifice works by the employer agreeing with the employee that they will stop paying their normal pension contributions and instead sacrificing that amount from their salary. The employer would then add that sum to their contribution and pay it into the pension scheme on behalf of the employee.

Question: Within Nest, how would we deal with individual workers with different additional voluntary contribution percentages. Would it be via multiple Nest groups? 

  • Answer: If an employee wishes to pay additional contributions they can remain within the same group and pay over on the same contribution schedule.  You may wish to check if your payroll software can support this.

Question: We have two groups – couple of old employees on total earnings (old scheme) and the rest of employees on qualifying earnings. An employee who had deductions on total earnings who goes on maternity leave stops contributions. When she comes back, after maternity leave she wants to re-instate contributions. Will her employer start deductions on total earnings (old scheme for just a few employees) or rather, will we start deducting contributions on qualifying earnings where all other employees are set up?

  • Answer: That will depend on what you’ve agreed with the employee in their contract of employment.

Question: Is the employer obliged to pay the full amount still, as the contract has been changed with the SSF contract (re employee on SMP )? I was under the impression it’s the employers responsibility. 

  • Answer: Yes, this is often the case but subject to what you’ve agreed at the outset in the contract of employment.