MRM:PSE and your T&Cs:How and why your T&Cs will change

[POSTMAN]

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Taking part in PSE requires a change to your contractual terms and conditions because your entitlement to basic pay is reduced by the amount you normally contribute to your pension plan.

Instead, we pay an increased employer contribution, so the amount paid into your pension stays the same.

This change enables you to make National Insurance contribution (NICs) savings. By making this change, your take-home pay will increase, if you pay NICs.

T&Cs

Your terms and conditions are not being changed in any other way by taking part in PSE. PSE does not involve any change to your pensionable pay, to the overall level of contributions made to your pension or to your Royal Mail pension benefits.

PSE will have no effect on other Royal Mail benefits, such as overtime, bonuses and sick pay.

A number of large companies whose employees are based in the UK have introduced PSE. These include BT, Tesco and Asda.

Union support

Both CWU and Unite/CMA support the introduction of PSE.

Ray Ellis, deputy general secretary postal at CWU said on a recent RMtv programme: ‘All other Royal Mail benefits will be calculated on pay before pension salary exchange takes effect so there will be no impact on other elements of pay at all.

‘PSE was something that we discussed through the business at the pension policy committee. It’s an opportunity for our members to save some money.

‘Most other defined benefit pension schemes have already gone down this route, it’s an HMRC approved method and we support it on that basis.’

Brian Scott, Unite national officer said: ‘PSE is a mechanism used by a number of companies to save National Insurance contributions and put more money in the pocket of employees. It’s a very good approach to be taken.’

[meercat]

it’s an HMRC approved method and we support it on that basis

Surely someone looses out? Not us, not RM and not even HMRC? So it's a win win for everyone???? Sounds like magic.

[RobertT]

it’s an HMRC approved method and we support it on that basis

Surely someone looses out? Not us, not RM and not even HMRC? So it's a win win for everyone???? Sounds like magic.

Both RMPP members and RM will still be paying more NIC’s from April 2016 but not as much.

HMRC will get less revenue than it would’ve, but as it’s a government sponsored scheme which they introduced about 15 years ago in the full knowledge that it will bring in less, I think that’s their problem not ours.

[meercat]

In other words it is HMRC approved (as RM put it) but perhaps not their preferred choice by an employer.

Maybe they are not bothered, as we know little give-away schemes are often designed by Government to win brownie points with the electorate but they get all the sacrificed money back to the Exchequer by raising the tax levels or cutting benefits in some other area.

[RobertT]

You only have to look at the budget to know that all George Osbourne does is give with one hand and take with the other. PSE/salary sacrifice is just one way he gives a little bit back to the countries workforce.