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Contributions and tax

Contributions and tax

Saving into a pension is a low cost and tax efficient way to save towards your future.


Salary sacrifice

IBM UK Limited may offer you the option of paying by salary sacrifice. You can choose to give up part of your pre You* salary in return for an increased pension contribution from IBM UK Limited. This means that your contribution is taken from your pay before tax, so you benefit from full tax relief straight away, and you save National Insurance too.
Use our salary sacrifice calculator to see how you could benefit.


Net pay

IBM UK Limited will take your regular contribution from your salary before tax and pass them on to us, along with any additional amount that they’re paying in for you.

This means that you’ll benefit from full tax relief straight away. If you don’t pay income tax because your earnings are below the income tax threshold, you will not benefit from the tax relief that a taxpayer would receive.

Your basic contributions

You build up your pension savings in your individual Retirement Account.

You pay into your pension by making Smart* contributions. As part of your  Smart* contributions, you elect to reduce your pre You* salary by 3%, IBM then puts this into your Retirement Account.

IBM pays 8% of your pensionable salary into your Retirement Account.*

*Enhanced M plan members will have different contribution rates depending on age.

For further information on your contributions please contact us using the contact details on this page.

Ways to pay in more


Depending on which section you are in, you can choose to pay:
  • Matched contributions  – During the quarterly You* benefit elections, you can elect to reduce your Pre You* salary by an additional 1% or 2% and IBM will match your contribution. This option is not available to Enhanced M Plan members.
  • Additional Smart* Contributions (ASCs) – Every month you can elect to reduce your salary further and receive an uplift from IBM of 6%. So, for every £100 that you elect, IBM will invest £106 into your Retirement Account.
  • Additional Voluntary Contributions (AVCs) – You can pay AVCs either as a percentage of your salary, a fixed monthly amount, or a one-time payment. AVCs are taken directly from your salary.

Please visit w3.ibm.com/hr/web/uk/benefits/pension/topping_up_your_pension_additio for instructions on how to change/start/stop an AVC election. You will need to scroll down to the section titled 'How do you elect to start additional contributions & what investment options are available' and then read the section that applies to your pension plan.


How your contribution options compare

Basic contributions

Matched contributions

ASCs

AVCs

Income tax relief

Yes

Yes

Yes

Yes

National Insurance Relief

Yes

Yes

Yes

No

Matched contributions

No

Yes

No

No

6% uplift by IBM

No

No

Yes

No

Variable Monthly Amounts

No

Yes

Yes

Yes

Start, stop or change at any time

No

Yes

Yes

Yes

For more details on the M Plan, please view the M Plan Factsheet.

Find out more

Investing your pension savings

Understand how your contributions are invested and what you need to consider.

Find out more

Limits on how much you can save

The tax allowances are set by the government each tax year. Find out what they are and how they could affect you.

Find out more

Tax information for higher earners

For higher earners, as well as taking into consideration the Annual Allowance, you also need to be aware of the Lump Sum Allowance. Find out further information about both of these limits.