Contributions

The contribution you make towards your Telefónica Pension Plan will depend on which section of the Plan you belong to.

 

Don’t forget, Core DC (Defined Contribution / Money Purchase) members can increase contributions at any time through Telefónica Rewards

 

You can also make an Income Booster (Additional Voluntary Contribution (AVC)) lump sum payment at any point. An Income Booster payment effectively allows you to allocate a chunk of your monthly pay into your Telefónica Pension. As the income booster payment cannot be made through salary sacrifice, you will benefit from Income Tax savings but no National Insurance Contribution savings. Please click here for more information on how to make an income booster payment. You can also click here to view our 'Pensions Planner', this allows you to review whether you're on track with your retirement savings and whether you may wish to increase your pension contributions.

 

You must pay a minimum contribution of 3% of your basic salary. Telefónica will then contribute an additional 6%, which will be paid into your Retirement Account. If you contribute more than 3% Telefónica will match your contributions, up to a maximum employer contribution of 11.5%.

 

Your contribution structure is as follows:

 

Employee Company
3% 6%
4% 6%
5% 6%
6% 9%
7% 9%
8% 9%
9% 11.5%
10% 11.5%

 

Your contributions are deducted from your pay before tax, giving you tax relief at your highest rate. So for example, if you pay tax at the rate of 20%, every £1 you contribute only costs you 80p. If you're a higher-rate tax payer, the net cost of every £1 you pay is only 60p.

 

If you're a high earner, there are some restrictions on your pension tax relief. If your total annual taxable income is £100,000 or more, we recommend that you discuss these restrictions with your Independent Financial Adviser.

 

You can save on National Insurance when making your pension contributions – see salary sacrifice.

 

If you stop paying contributions for whatever reason, but are still employed by Telefónica we will be required to automatically enrol you back into the Plan. Click here for more details.

 

Your plan salary is likely to be subject to the 'earnings cap'. Our FAQs page has more information on what this may mean for you. 

 

 You receive the following:

 

  • Pension Supplement of 21% of your pensionable pay until 30 June 2016
  • Pension Supplement of 16% of your pensionable pay thereafter

 

You can choose to allocate a minimum of 9% of your Pension Supplement to make contributions to the Core DC Plan paid free of tax or National Insurance Contributions subject to tax limits, see tax allowances for more information.

 

At any time you can increase or decrease your contribution rate (but not below 9%) through the Flexible Benefits website at Telefónica Rewards

 

Your contributions are deducted from your pay before tax, giving you tax relief at your highest rate.

 

So for example, if you pay tax at the rate of 20%, every £1 you contribute only costs you 80p. If you are a higher-rate tax payer, the net cost of every £1 you pay is only 60p.

 

If you are a high earner, there are some restrictions on your pension tax relief. If your total annual taxable income is £100,000 or more, we recommend that you discuss these restrictions with your Independent Financial Adviser.

 

You can save on National Insurance when making your pension contributions – see salary sacrifice.

You will be auto-enrolled at the following rates:

 

Time period What you will pay What Telefónica will pay Total contribution
1 April 2013 - 31 December 2016 1% 2% 3%
1 January 2017 - April 2019 2% 4% 6%
April 2019 onwards 3% 6% 9%

 

 

At any time you can increase your contributions through Telefónica Rewards.

 

The minimum contribution level increases over time with the final increase due to automatically take effect on 1 January 2018. However, this has now been delayed until April 2019 which is the latest deadline for Companies to increase their auto-enrolment contributions to an overall contribution of 9% in line with the current legislation. This is illustrated in the tables above. 

 

If you increase your contributions, you'll become a Core DC (Defined Contribution) member of the Plan.

 

If you stop contributing to the Plan for whatever reason, but remain employed by Telefónica, we will be required to automatically re-enrol you back into the Plan. Click here for further information.

 

More information is available at Telefónica Rewards. Alternatively, please click here for more information on auto-enrolment.