Benefits of a pension
To supplement the information on our occupational pension schemes, this section provides information about the benefit of joining a pension scheme, and general information about how your pension works.
Below you can find:
Elsewhere on our website you can also find
- Which scheme applies to you
- Pension schemes the University offers, including the proportion of your pay that you would need to pay into the scheme each month.
- Pension & Tax Changes - important changes to pensions, tax and National insurance that may affect your income or retirement.
- If you're starting to think about your planning for Retirement there is also information to support you.
Benefits of joining a pension scheme
Many people have not given their pension a great deal of thought. You may not be aware of what basic state pension you'll receive (see below), or have thought about whether it will be enough.
If you're already in one of our workplace pension schemes you can find out more about what you, your employer and the Government pay in below.
If you haven't yet joined a pension scheme, for example because you've only just started working for us or have previously opted out, or if the Government's auto-enrolment initiative has started you thinking about your pension, you can find out more below.
What choices do I have?
- If you do paid work for the University, most people will automatically be included in one of our workplace pension schemes, either under the scheme rules or under auto-enrolment. You can always opt out -- now or in the future -- but you should think carefully about the benefits of a workplace pension before reaching a decision.
- A few people may be too young or too old to qualify for pension membership.
- If you only do very short-term non-academic work for us (for example on a fee & expenses claim basis) you may not be automatically put in a workplace pension, although you'll probably still be able to opt-in.
Do I get help?
- You are not the only one paying in – the University also pays into your pension over and above your salary and the Government provides tax relief on pension contributions.
- It’s easy for you to get started and begin saving for your retirement.
- You may be able to get personalised information from the start about the money paid into your pension pot.
- You can get pension estimates and use calculator tools from the start.
What’s in it for me?
- The full basic State Pension is quite low. You will probably want more.
- You will have your own pension. The pension schemes provide an ongoing annual pension after you retire, and/or an additional one-off payment when you retire. Normal retirement age is 65 (unless you are under the old rules for TPS).
- For most people, doing something is better than doing nothing.
- It’s hardly ever too early or too late to do something.
- Build peace of mind for the future.
Our Defined Benefit schemes (LGPS, TPS and USS) do not pay out the same amount of contributions that you pay in:
- The benefits you get when you retire are based on the length of your membership in the scheme and your final pay (or career average pay if applicable).
- The pension you build up during your employment keeps pace with your pay rises.
- And after you retire, your pension keeps pace with cost of living increases.
The University also pays into your pension over and above your salary and the Government provides tax relief on pension contributions:
There are also additional benefits which can apply, for example:
- The opportunity to claim your pension early if you have to retire due to ill health
- Benefits to provide for your spouse or dependants after your death.
- You can retire early if you are prepared to take a reduction in your pension
- There are ways of paying additional amounts to increase your pension.
- Increasingly, phased or flexible retirement options may be available depending on institutional requirements.
Are there any risks?
- Pensions are a long-term investment – they usually produce better returns than savings accounts.
- Having a pension doesn’t rule out other ways of saving.
- Pensions are now better protected in a number of ways.
- This does not replace or affect entitlement to the State Pension.
- The money is not lost if you move jobs or die before you retire.
How do I join?
Pensions auto-enrolment applies to the University, which may mean that you are automatically enrolled in the applicable pension scheme (see above) or have the right to opt in.
In addition, the Teachers Pensions Scheme and Local Government Pension Scheme both automatically enrol eligible staff through their own statutory rules.
This means that when you join us you may well be included in a pension scheme automatically; you'll be told this when you join us. If you want to opt out, you'll need to tell the revelant pension scheme on their own form; this is to make sure that your employer doesn't pressure you into opting out.
If you're not automatically included, or if you opt out and then later change your mind, you can opt in by contacting Payroll.
See above for details of which schemes apply, and then look at the details of each scheme to see what it offers and how much you would need to pay into the scheme each month.
What is auto-enrolment?
Auto-enrolment is a legal duty on every employer within the United Kingdom to enrol eligible workers into a pension scheme. This is part of the Government’s aim to get people saving more for retirement, above the basic state pension. It is designed to encourage individuals to plan and save for their retirement. For more on the benefits of pension membership see here.
The University of Sunderland implemented auto-enrolment on 1st September 2013. From that date we started assessing all workers paid each month to see how auto-enrolment affects them. University of Sunderland in London and Sunderland Intern Factory are subsidiary companies which have their own staging dates for auto-enrolment in 2017. If you work for either company then auto-enrolment does not apply to you for a few years yet. Please contact your HR representative for more details.
It affects staff who aren’t already in a workplace pension scheme and who meet certain criteria (see below).
Don't we put people in a workplace pension scheme anyway?
Yes, in most cases. The University's workplace pension schemes are Teachers Pensions, Local Government Pension Scheme [Tyne and Wear Pension Fund] and in certain circumstances Universities Superannuation Scheme. All are qualifying pension schemes which meet or exceed the Government’s new standards. For more information about the pension schemes see which scheme applies to me?
We enrol all new staff in LGPS or TPS when they join the University unless they opt-out -- EXCEPT non-teaching (LGPS) staff on contracts due to last less than 3 months, who have to opt-in under LGPS rules. That means that our staff are more likely to be enrolled under the pension schemes' own rules than under auto-enrolment, but auto-enrolment provides a 'safety net'.
University of Sunderland London Campus uses the NEST pension scheme on a voluntary opt-in basis, since the auto-enrolment regulations do not yet apply to this subsidiary company.
What are the qualifying criteria?
The University has a legal duty to enrol workers in a workplace pension scheme who qualify for auto-enrolment - that is, who normally work in the UK and:
- are not already in a workplace pension scheme*
- are aged 22 or over
- are under State Pension age (this varies depending on your gender and date of birth)
- earn more than £787 in a given month (this figure may change each April)
If you earn less than that in a month, you are not auto-enrolled but can opt-in (as long as you’re aged from 16 to 74).
If you have more than one job at the University you are assessed separately on each job. If you work for more than one employer, again you are assessed separately by each employer.
(You may still be enrolled under the rules of our pension schemes even if you don't qualify using the above criteria.)
How does this affect me?
- For new starters and existing staff who are not already in the pension scheme we assess your age and earnings every month until you either join or opt-out of auto-enrolment. The first time you qualify, you’ll be auto-enrolled in that month unless you opt-out.
- In some cases, for example casual work, we may postpone your assessment by up to three months and assess you at the end of that period. We'll tell you if so.
- Once you've either joined or opted out, we won't assess you again each month - but we are required to re-enrol qualifying workers every three years (see below), unless they opt-out again.
- You can opt-in at any time, as long as you're aged between 16 and 74.
Automatic Re-enrolment (September 2016 and every three years)
On a three-yearly cycle we must put eligible jobholders who are no longer active members of a qualifying pension scheme, back into an automatic enrolment scheme.
This could be because you have chosen to opt out since September 2013. It also applies if you have chosen to reduce your contributions, for example by moving into the LGPS 50/50 Scheme.
We DON'T have re-enrol you if:
- you opted out within the previous 12 months (prior to September 2016).
- you resign or are dismissed before, or up to 6 weeks after, the automatic enrolment/re-enrolment date. (During your notice period you cannot opt-in or join.)
Staff who were here in September 2013 and were notified that their assessment had been delayed until October 2017 will be assessed again in October 2017 (instead of September 2016.)
If we re-enrol you and you still don't want to be a member of our workplace pension schemes you will need to opt back out - or opt to return to the 505/50 scheme.
If you are enrolled (or re-enrolled) but decide you don't want to be in the pension scheme you have a month to opt out from the date we write to you, and you'll get a refund of your pension contributions.
Before deciding to opt-out you should think carefully about the benefits of joining a pension scheme. If you're sure you don't want to be in a workplace pension you can opt-out. You may have to do this quite quickly to avoid paying contributions in the first month that you qualify. However you can opt out within a month of getting our letter about auto-enrolment and get a refund. To do this, you'll need to get the opt-out form from the appropriate scheme (see below) and complete and sign your section, then return it to us to complete our section at: HR Payroll, University of Sunderland, 3rd Floor, Edinburgh Building, City Campus, Chester Road, Sunderland, SR1 3SD.
If you opted out of a workplace pension at the University before the introduction of auto-enrolment on 1st Sept 2013 then you have to opt out again the first time you qualify for auto-enrolment. If you're a member of a workplace pension scheme for more than one job at the University, or at more than one employer, you'll have to opt out for each job separately. See the opt-out forms for details.
Once you've opted out of auto-enrolment once, you don't have to opt-out again each month (but employers are required to re-enrol qualifying workers every three years, so if you still want to opt out you'd have to do so again at that time.)
If you decide to leave the pension scheme more than a month after getting our letter about being enrolled, what happens depends on the rules of the pension scheme: see here for Teachers Pensions, and here for LGPS (Tyne and Wear.)
You can still voluntarily opt back in at any time, as long as you're aged between 16 and 74.
Where can I learn more?
- Calculate your State Pension Age (Government website)
- Government FAQ (Frequently Asked Questions) booklet on workplace pensions and being enrolled (PDF)
- Glossary of pensions terms (from NEST)
If you have a query, please email us at email@example.com (quoting “Pensions auto enrolment” in the subject).
This page was published on 7 June 2016