A salary sacrifice arrangement is a contractual agreement between you and your employer where you agree to give up some of your salary (‘the sacrifice’) in return for a benefit from your employer, such as a pension contribution. These schemes vary between different organisations so details of your agreement will be set out in the terms and conditions of your employment. Salary sacrifice agreements are described as ‘by agreement’– that is, decided between you and your employer.
Your original salary is known as the ‘pre-sacrifice salary’ and your reduced salary after sacrifice is your ‘post-sacrifice salary’.
If you have a salary sacrifice agreement and you’ve been furloughed under the Coronavirus Job Retention Scheme, your employer is still required to make pension contribution payments and follow their usual pension arrangements.
At no point can your employer ask you to temporarily suspend or stop pension contributions.