Published
29th April 2022
Monthly Assessment Review
APRIL 2022
Changes to pension contributions
The introduction of iTrent has enabled the implementation of a policy decision to achieve greater fairness in the way your pension contributions are calculated.
In the simplest terms, from 1 April 2022, the assessment of the pension contributions you pay is to be performed monthly rather than annually.
Reviewing contributions monthly is a much fairer way of calculating the correct contributions that are due for the benefits that you receive.
This is common practice for many employers and this change has been agreed with the Trade Unions
Most people won’t see any change to their pension contributions, as the amount they
Most people won’t see a change to their pension contributions as the amount they earn doesn’t change from month to month.
However, if your earnings change (for example if you work a large amount of overtime) you may move into a higher pension band and the contributions will increase.
If earnings go down in a particular month (if you reduce your hours for example) your contributions may decrease.
These are the bandings effective from 1 April 2022
|
Contribution table 2022/23 |
|||
|
|
main scheme |
50/50 section |
|
|
up to |
£ 15,000.00 |
5.50% |
2.75% |
|
£ 15,001.00 |
£ 23,600.00 |
5.80% |
2.90% |
|
£ 23,601.00 |
£ 38,300.00 |
6.50% |
3.25% |
|
£ 38,301.00 |
£ 48,500.00 |
6.80% |
3.40% |
|
£ 48,501.00 |
£ 67,900.00 |
8.50% |
4.25% |
|
£ 67,901.00 |
£ 96,200.00 |
9.90% |
4.95% |
|
£ 96,201.00 |
£ 113,400.00 |
10.50% |
5.25% |
|
£ 113,401.00 |
£ 170,100.00 |
11.40% |
5.70% |
|
£ 170,101.00 |
or more |
12.50% |
6.25% |
Here are some examples of how this may affect you:
|
Monthly Pay |
Annual Pay for banding purposes |
Contribution Rate |
Contributions payable on new method |
Contributions that would have been payable previously |
|
£2700 |
£32400 |
6.5% |
£175.50 |
|
|
£3200(includes £500 overtime) |
£38400 |
6.8% |
£217.60 |
£208.00 (6.5%) |
|
£1900 (reduction of hours |
£22800 |
5.8% |
£110.20 |
£123.50 (6.5%) |
The employer contributions will be similarly increased or decreased
FAQ’s
Previously, we assessed the rate due for the next financial year using the pay earned @ 31 March of the previous year. This resulted in many members paying an incorrect rate until the banding was assessed again.
Membership from 1 April 2014 is based on the pay that you earn in each financial year. You receive 1/49th of the pay which results in the pension credit for that year.
e.g. 1.4.21 – 31.3.22 if you earned £28000, you would receive a pension credit of £571.42 (£28000/49)
It is a much fairer method of calculating the contributions that are due on actual pay earned each month and means we don’t have to wait until the start of the next financial year to make the changes.
Please see: www.lbbdpensionfund.org for more information about the benefits of the scheme or email: [email protected]
