Pension reform cost calculator

Terms of use

• This tool is for information only and provides approximate cost estimates.
• The results generated by the tool are based on data supplied by the Employer (or its advisers) and assumptions made based on Standard Life’s understanding of Part 1 of the Pensions Act 2008 at May 2012.
• Standard Life does not accept any liability for any loss caused due to the Employer (or its advisers) relying on the results generated by this tool.

Limitations

• The categorisation of your workforce into the eligible, non-eligible, entitled and other groups, and hence your comprehensive estimate of the annualised employer cost, depends on their age, their salary and their State Pension Age.
• This tool fixes the categorisation of your workforce at your staging date, and does not reflect the changes in age and any consequential categorisation and annualised employer cost changes over the three phases to October 2018 and beyond. Whether your actual annualised employer costs are higher or lower will depend on the actual age profile of your workforce and their opt in and opt out rates.
• This tool assumes that salaries do not change from the values input. If salaries increase then, other things being equal, the annualised employer cost will also increase.
• This tool determines State Pension Age in a very approximate way that overstates it. This causes the number of eligible workers to be overstated and the number of non eligible workers to be understated. Whether your actual annualised employer costs are higher or lower will depend on the opt in and opt out rates.
• The comprehensive estimate of the annualised employer cost is based on pensionable salary, and so may be higher than the legislative minimum cost.
• This tool only enables fixed contribution levels to be input. It does not enable contribution levels to vary with age, length of service, or any other feature, and so will not reflect the actual annualised employer cost for schemes for which contribution levels vary.
• The costs are illustrative, based on the assumptions. Your actual costs may be higher or lower.

Assumptions (all calculations)

• Qualifying earnings are salaries between £5,668 and £41,450. The earnings trigger for eligible workers is £9,440. These limits are assumed to remain unchanged over the three phases to October 2018 and beyond.
• Your number of employees is assumed to remain unchanged over the three phases to October 2018 and beyond.
• Your employees all work in the U.K.

Assumptions (Comprehensive estimate)

• Pensionable salary is at least equal to basic pay for all employees.
• Employer National Insurance rates are 13.8% and are assumed to remain unchanged over the three phases to October 2018 and beyond.

Assumptions (Quick and simple estimate)

• All employees are eligible for an employer pension payment.
• The average salary for employees in a band is the mid point of that band.
• Pension payments are based on qualifying earnings, with default employer pension payments of 1% in phase 1, 2% in phase 2 and 3% in phase 3.