3. Statement of Policy
3.1 Employees adversely affected by pension tax allowances may choose to opt out of future pension provision and apply for a cash supplement of up to 12%, subject to certain eligibility criteria.
4. Eligibility
4.1 To be eligible for the supplement in lieu of pension, an employee must:
- be an employee of the University, Cambridge Enterprise or JBS Executive Education;
- be able and willing to demonstrate that they will be subject to tax charges relating to either the Lifetime Allowance (LTA) or the Annual Allowance (AA) i.e. they have exceeded the AA or are expected to exceed the LTA and have benefit statements from their pension providers (including USS) and/or a protection application certificate or acknowledgement from HMRC;
- confirm that they have taken the Enhanced Opt Out (USS members only); OR confirm that they have elected to use the Voluntary Salary Cap and have either chosen to pay the 2.5% contribution on salary above the VSC to maintain death and ill health benefits or signed the appropriate declaration (USS members only); OR sign a declaration on the application form confirming that they understand opting out of active pension scheme membership will mean they no longer automatically benefit from death in service and active member ill health provisions (all schemes);
- confirm that they have taken independent financial advice in relation to this matter; and,
- consent to a variation to their contract of employment.
4.2 The University is committed to investing in pension provision for employees so that at retirement they are more financially secure. The University does not want to provide any encouragement to employees who may not be financially secure to opt out of pension scheme membership. Individuals likely to be affected by the pension tax limits are typically high earners with a high degree of financial security for retirement as a result of previous pension scheme membership.