Answering your questions

This is when you agree to exchange part of your salary so you can get extra benefits from your employer. Examples of such benefits offered are child care vouchers and our Green Cars scheme.

It reduces the amount of National Insurance contributions you pay as a member of a Pension scheme. The Company also pays lower National Insurance contributions and this helps offset the costs of providing other benefits to colleagues.

The majority of colleagues would be better off. There are a small number of colleagues who may not benefit from an increase in take-home pay. However, you would not be worse off by taking part in a pensions salary sacrifice scheme.

If you chose to participate in the pension salary sacrifice scheme, your pay would be described in two different ways in the future. Your pre-salary sacrifice pay will be known as Reference pay, which is your total pay - your basic salary, plus all additions received, including allowances, overtime, etc. before taking into account the new salary sacrifice reduction. Your pay after any salary sacrifice will be termed as your Contractual pay, which is the amount that National Insurance Contributions are paid against. Whilst opting into a pension salary sacrifice scheme would reduce your contractual pay, you actually increase your take-home pay. salary sacrifice delivers National Insurance savings, allowing you to keep more of your take-home pay than would be the case if you joined on a non-salary sacrifice basis.

Yes. You would remain a member of your current pension scheme and your pension benefits and entitlements/contributions would not change as they would be based on your reference salary.

The following are examples of lifestyle events:

  • You commence or return from maternity or adoption leave;
  • The birth or adoption of a child;
  • You get married or enter into a civil partnership;
  • You get divorced or end a civil partnership;
  • A material change to your own, your partner’s or dependant’s circumstances;
  • You commence or return from a period of long-term absence or secondment;
  • A significant change to your working hours or contractual terms of employment;
  • You join or leave one of the Heathrow sponsored pension schemes; or
  • You reach your State Pension Age.

No. Your hourly overtime rate would continue to be calculated, as at present, on your reference salary.

There would be no change to your UK tax position as a result of participating in salary sacrifice. However, the introduction of salary sacrifice would mean that full tax-relief on pension contributions would be provided at source, regardless of which pension scheme you participate in. Currently, members of the Defined Contribution scheme must claim back higher rate tax-relief from the Tax Office – this would no longer be necessary.

Changing to pension salary sacrifice would represent a change to the terms and conditions of your employment. However, all other employment terms and benefits would be unaffected by the restricted change required to implement salary sacrifice.

No, your benefits from the Scheme would be unaffected. If you would like further information about your Scheme pension, please call OneHR on 0800 561 6060 (internal 646060).

You will only need to do so if you are both a member of the Defined Contribution Pension Plan and a higher rate tax payer who is claiming the additional tax-relief available to you through an adjustment to your tax code. You should contact HMRC as soon as possible to let them know that you are now a member of a pension scheme that uses salary sacrifice. As the salary sacrifice scheme means that contributions are being taken from your pay before tax and NI contributions are calculated (and paid as an employer contribution), this allows you to fully benefit from the tax-relief available. There is, therefore, no longer a need for a tax code adjustment and HMRC should be advised of this. You will not need to take any action if:

  • You are a member of the BAA Pension Scheme (our defined benefit scheme); or
  • You are a member of the BAA Defined Contribution Pension Plan (or defined contribution scheme) and a basic rate tax payer.