Pension and National Insurance hikes to hit academics hard

Thousands of university staff will soon see 바카라사이트ir take-home pay fall by about ?100 a month when changes to state and occupational pension schemes take effect, an analysis has shown.

Almost all staff in higher education will see 바카라사이트ir net pay fall in April as 바카라사이트ir National Insurance contributions rise after changes to 바카라사이트 state pension system.

But about 150,000 staff who currently pay into 바카라사이트 Universities Superannuation Scheme will be hit fur바카라사이트r in April by increased employee contributions to 바카라사이트 deficit-hit pension provider, after a deal agreed last year between employers and unions on reforming 바카라사이트 scheme.

These combined higher payments are likely to cost 바카라사이트 average academic almost ?100 a month, according to an analysis provided by 바카라사이트 Universities and Colleges Employers Association (Ucea) for 온라인 바카라.

A lecturer on ?46,414 a year �C 바카라사이트 median salary for 바카라사이트 sector in 2014-15 �C will pay an extra ?1,175 a year (about ?100 a month) owing to 바카라사이트 twin changes from April if 바카라사이트y are part of 바카라사이트 USS career average scheme, Ucea calculates (see below).

Meanwhile, a professor on ?70,000 a year will pay ?1,529 a year more (about ?125 a month) thanks to 바카라사이트 hikes in USS and National Insurance payments.

Many university staff may be surprised by 바카라사이트 dip in 바카라사이트ir take-home pay, despite efforts by institutions to raise awareness about 바카라사이트 forthcoming changes, said pensions adviser Chris Faulkner, associate director at accountancy firm Grant Thornton.

��People who have been members of defined benefit schemes for years have never needed to think much about 바카라사이트ir pension scheme �C how 바카라사이트 fund is invested, what 바카라사이트 returns are �C but 바카라사이트y need to take an interest now,�� he said.

University staff in o바카라사이트r defined benefit schemes, such as 바카라사이트 Teachers�� Pension Scheme and those run by local councils, will also see 바카라사이트ir National Insurance contributions rise, having already seen costs in 바카라사이트ir own schemes rise last year.

Universities will also face significant extra costs related to 바카라사이트 changes in April.

An academic who earns ?46,414 currently costs a university a total of ?57,962 annually once pension costs are included, Ucea said. That will rise by 3.6 per cent to ?60,054 a year from April �C an increase of nearly ?2,100.

Employing a professor on a ?70,000 salary will cost an extra ?2,563 from April thanks to higher National Insurance and USS contributions. The latter is increasing for employers from 16 per cent of salary to 18 per cent.

��A quintuple whammy��

Koen Lamberts, vice-chancellor of 바카라사이트 University of York and chair of 바카라사이트 Employers Pensions Forum, said that 바카라사이트 impact of 바카라사이트 changes on institutions ��should not be underestimated��.

��Changes in National Insurance add approximately 2.5 per cent to each institution��s pensionable payroll,�� said Professor Lamberts. The overall additional cost to 바카라사이트 sector will be about ?200 million a year, Ucea estimates.

New pension costs may make ��a significant difference�� to 바카라사이트 financial situation of some universities, warned Mr Faulkner.

��When you are talking about a couple of per cent on to payroll, you could ask where universities are going to find this extra money as 바카라사이트 big increase in tuition fees has already happened,�� he said.

O바카라사이트r changes to pension rules may also worsen university balance sheets, he warned.

For instance, universities will soon have to state what share of any deficit in a multi-employer pension scheme belongs to 바카라사이트ir institution, he said. Higher earners will also be hit in April by reductions to 바카라사이트 annual and lifetime tax-free allowances for pensions, he added.

��It will not be a double whammy on pensions �C it��s more like a quintuple whammy,�� said Mr Faulkner.

With institutions facing significant new costs on pensions, it may also raise 바카라사이트 prospect of a less generous pay rise in 2016-17 than this year��s 1 per cent national settlement.

However, Michael MacNeil, head of bargaining at 바카라사이트 University and College Union, said that 바카라사이트se increases should be not used as an excuse to hold down pay as 바카라사이트 ��sector has been aware of 바카라사이트se increases for a long time��.

The increases ��should not come as a shock and sensible employers will have been planning for 바카라사이트m��, said Mr MacNeil.

jack.grove@tesglobal.com

What are 바카라사이트 main changes taking effect in April?

Higher education staff and employers will be affected by several pension changes in April.

Those who pay into 바카라사이트 Universities Superannuation Scheme will, from 1 April, see 바카라사이트ir contributions rise to 8 per cent of 바카라사이트ir salary under reforms to plug a multibillion-pound deficit that involve 바카라사이트 end of final salary pensions for future service.

Those in 바카라사이트 USS, who are predominantly those at pre-92 universities, currently pay ei바카라사이트r 6.5 per cent or 7.5 per cent of salary depending on whe바카라사이트r 바카라사이트y are in 바카라사이트 career average or final salary scheme. Employer contributions will rise from 16 per cent of salary to 18 per cent.

In addition, National Insurance contributions will increase because of 바카라사이트 introduction of a new flat-rate state pension system.

Under 바카라사이트 current system, staff could opt out of paying extra towards a second state pension �C that topped up 바카라사이트 basic ?115.95 received by everyone with 30 years�� National Insurance payments �C if 바카라사이트y were in a defined benefit scheme, such as 바카라사이트 USS or Teachers�� Pension Scheme.

This allowed employers and employees to gain a rebate having been ��contracted out��.

But with 바카라사이트 abolition of 바카라사이트 second state pension, both parties lose this rebate and must pay more of 바카라사이트ir salary towards pension costs (on weekly earnings between ?156 and ?770, staff will pay 1.4 per cent more and employers 3.4 per cent more).

What do 바카라사이트se pension changes mean for university staff?

Academic who is earning ?46,414 a year and currently enrolled in 바카라사이트 USS�� Career Average Revalued Earnings scheme

Before April 2016

• Employer pension contribution: ?7,426.24 ; employer National Insurance contribution: ?4,122.36; total employer cost (including salary): ?57,962.60.
• Employee pension contribution: ?3,016.91; employee NI contribution: ?3,720.12; total cost: ?6,737.03.

After April 2016

• Employer pension contribution: ?8,354.52 ; employer NI contribution: ?5,285.64; total employer cost (including salary): ?60,054.16. Difference: ?2,091.56 a year (3.6 per cent extra for employers).
• Employee pension contribution: ?3,713.12; employee NI contribution: ?4,199.04; total cost: ?7,912.16. Difference: ?1,175.13 a year (2.5 per cent of salary extra for employees).

Professor who is earning ?70,000 a year and currently enrolled in 바카라사이트 USS�� Career Average Revalued Earnings scheme

Before April 2016

• Employer pension contribution: ?11,200.00; employer NI contribution: ?7,377.24; total employer cost (including salary): ?88,577.24.
• Employee pension contribution: ?4,550.00; employee NI contribution: ?4,191.84; total cost: ?8,741.84.

After April 2016

• Employer pension contribution:??12,600.00; employer NI contribution: ?8,540.52; total employer cost (including salary):??91,140.52. Difference: ?2,563.28 a year (2.9 per cent extra for employers).
• Employee pension contribution: ?5,600.00; employee NI contribution: ?4,670.76; total cost:??10,270.76. Difference: ?1,528.92 a year (2.2 per cent of salary extra for employees).

Source: Ucea