GlaxoSmithKline (GSK) is to introduce a salary sacrifice arrangement for its trust-based defined contribution pension plan this month.
Under the new arrangement, employees will make tax and national insurance (NI) savings on all contributions they make to the scheme. GSK will also make NI savings, which it will pass on to staff in the form of increased pension contributions.
Harsha Modha, director of benefits programmes at GSK, said the pharmaceuticals giant had introduced pensions salary sacrifice to fund increased pension contributions for staff and remain competitive in its market.
As a result, the company will increase its core contributions from 4% to 5% of employees' pensionable pay and match employees' contributions up to 5% of pensionable pay. This means that, from this month, if an employee contributes 5% of pensionable pay, 15% will be paid into their pension fund each month - 5% as GSK's core contribution, a 5% employee contribution, and 5% as GSK's matching contribution.
All employees have received written information on the changes, and will be switched into the salary sacrifice arrangement unless they opt out in writing.
To increase their pension contributions, staff must inform the pension administrator by phone.