Salary Exchange for pensions is HM Revenue and Customs (HMRC) approved “salary sacrifice” scheme for members of the Universities Superannuation Scheme (USS). It results in National Insurance (NI) savings for both pension scheme members and the University. The University obtained clearance from HMRC for a scheme and introduced Payflex+ for pensions.

How it works

A pension salary sacrifice/ exchange works on the basis that you no longer pay your USS pension contributions and, instead, the University will increase its pension contribution amount equal to those contributions. In this way the University will pay an amount equal to both the employers’ and employees’ pension contributions. You then agree to reduce your pay by that amount. This creates savings by reducing the amount of NI Contributions (NICs) you and the University pay on your pension contributions, but without affecting your USS pension benefits or state benefit entitlements (such as your State Pension).

For the majority of members, this will result in a lower NIC for both you and the University.


All members of the USS are eligible to participate in the salary exchange for pensions, provided their reduced pay does not fall below the statutory levels (National Minimum Wage (NMW) or National Living Wage (NLW). If in any month participation in this arrangement would bring their reduced pay close to the statutory levels, they would be excluded from participation. Similarly, to ensure that entitlement to state benefits is not affected, employees will be excluded from participation in any month where their reduced pay would fall below the NI Lower Earnings Limit (LEL). Staff will be notified of their individual circumstances.

USS members who do not pay NICs (because they are over State Pension age) will not make savings but will still be included in the scheme as this will not disadvantage them.

Other information

  • Salary increases continue to be based on the pre-reduction salary (Base Pay) as defined in the University pay scales
  • All pay elements such as overtime, shift allowances etc will be calculated with reference to your Base Pay
  • When requests to confirm salary, such as mortgage requests, are received your Base Pay will be quoted
  • The salary reduction is shown on your payslip as the following (there are different suffixes depending on the scheme) for example:   
USS 2016 Pension 9.60 -408.27
NI – A 369.96
USS 2016 Matched 1.00 -42.53
USS 2016 Unmatched DC 42.53
USS 2016 Matched DC 0.00
USS 2016 Salary Sacrifice 0.00