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What is the “Salary Sacrifice” arrangement?

The Salary Sacrifice or Salary Exchange is the default method by which pension scheme contributions are paid into pension schemes. It makes no difference to the amount that’s paid – only the method by which it is deducted through the employee's salary.


What is the difference of paying through Salary Sacrifice?

By paying into a pension scheme through Salary Sacrifice, the University pays your employee contribution on your behalf, and instead, your gross pay is reduced by the amount of the pension contribution, which is how the University recoups from you what it has paid to the scheme. In this way, there is absolutely no difference to the amount of the pension contribution that will be deducted through your salary.


So why is it a benefit to me?

Because you have a reduced salary (by the amount of your pension contribution), you pay lower National Insurance contribution than you would otherwise and your take home pay is slightly higher as a result. The tax relief for pension contributions is unaffected by Salary Sacrifice.


If I leave the scheme before the minimum 2-year qualifying period for a deferred award, are my contributions still refundable if I pay into the scheme through Salary Sacrifice?

No. None of the contributions paid through Salary Sacrifice are refundable should you leave the scheme.


I am on a temporary contract / will not achieve 2 years’ service. Can I opt-out of Salary Sacrifice so that my contributions will all be refundable?

Yes. Simply complete a CAMBens for Pensions Option Form, and return it to the Pensions Office