Contributions 

Basic contributions

You and Cummins pay monthly contributions into the Plan. You must pay a basic contribution of 3% of your pensionable pay and Cummins will pay a basic contribution of 5% into your pension fund.

Paying more

If you’d like to save more than the basic amount, you can choose to pay saver contributions up to a maximum of 4% of your pensionable pay. The Company will also help you save more by matching your saver contributions. You can increase or reduce your saver contributions and the Company’s saver contributions will change accordingly.

Basic contributions Total
You pay Cummins pays
3% 5% 8%
Saver contributions Total (basic + saver) contributions
You pay Cummins pays
1% 1% 10%
2% 2% 12%
3% 3% 14%
4% 4% 16%

Additional voluntary contributions

If you’d like to save more than the maximum saver contributions, you can pay additional voluntary contributions (AVCs). These would be invested in the same way as your other contributions. However, unlike basic and saver contributions, the Company will not match any AVCs you make.

How much does it cost?

Saving into the Plan costs you less than you think because you get tax relief on your pension contributions. Your contributions are deducted from your pay before your tax is calculated. This happens automatically through the Company payroll.

If you’re a basic rate (20%) taxpayer, this means that every £1 you contribute to your pension actually costs you 80p.

If you’re a higher rate (40%) taxpayer, every £1 you contribute to your pension actually costs you 60p.

You pay your contributions using SMART, so you make savings on National Insurance too. SMART is a salary sacrifice arrangement which stands for ‘save money and reduce tax’. For a basic rate taxpayer, the cost of contributing £1 to your pension comes down to 68p. If you have any questions, please contact us.

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