MAC SMART Pension
What is a "MAC SMART" Pension?
MAC Financial launched its new, innovative approach to pensions earlier this year and many companies and employees are now seeing the benefit.
Through "MAC SMART" Pension offering, we can provide opportunities for both employers and employees to save National Insurance contributions thereby increasing employee's take-home pay, whilst not affecting any other benefits and decreasing employers NI contributions.
Additionally, employers have the opportunity to share in the uplift afforded to their employees through NI savings.
HMRC in the UK have published guidelines regarding the operation and principle of the SMART Pension scheme and MAC has confirmed with the DHSS and Assessor's Office here that similar provisions can be adopted on the Island.
The "MAC SMART" pension offering is a form of Salary Sacrifice and as a concept has been around for many years. However the different approach MAC's SMART pension offering takes together with clarification from the appropriate authorities, means that many of the previous drawbacks of Salary Sacrifice arrangements have been overcome.
The important point is that "MAC SMART" will work with your existing pension scheme – it is just a different approach – The "MAC SMART" approach.
For further information please contact Nigel Gregg or one of the team at MAC.
Summary of how the "MAC SMART" Pension works
- Participating employees sacrifice a cash salary equivalent amount to the contributions they are making to the company’s approved pension scheme;
- The employer agrees to increase its contributions to the pension scheme by an equivalent amount;
- Employees are notified that the new arrangements will automatically apply from a particular date unless they opt out in advance;
- If they do not opt out at the start, employees cannot opt out again until the first anniversary of the commencement of the scheme, unless they experience a 'lifestyle change' (marriage, birth of a child, separation or divorce, death of a partner or child, change from full-time work to part-time); Participation in the scheme brings about a change to the terms and conditions of employment of the participants; and
- The participating employee's previous gross salary ("base salary") remains the yardstick for other issues (e.g. the calculation of overtime pay, annual salary increases or salary-related benefits).