Tax matters

As a contributing member of the Compass Group Pension Plan you will receive full tax relief on the contributions that you pay (please note that there are limits on the amount of tax relief that can be received but this is set at a level that is unlikely to be of concern to most members).

Consequently whilst the full gross deduction is shown on your payslip, the actual effect on net pay is much lower.

This net pay cost is reduced further still because as a member of the Compass Group Pension Plan you are contracted-out of the State Second Pension and therefore pay less National Insurance Contributions.

Other tax issues:

  • At retirement you will normally be able to exchange part of your pension for a once only lump sum.  This lump sum is paid tax-free.
  • When you receive pension payments this will be taxed as earned income in the same way as your pay is taxed.