When you join CARE you will automatically become a member of the AA’s salary exchange arrangement, known as AA Plus. By being a member of CARE and making contributions through AA Plus, both you and the Company will benefit from National Insurance savings, leaving more money in your pocket! See the CARE Scheme Booklet in the Document library for an example of the increase to your take-home pay based upon a basic rate and higher rate tax payer.
The Company makes payments into CARE on your behalf. In exchange, your salary will be reduced by the same amount.
Your pension benefits will not change. They will be calculated based on your salary before any adjustment for AA Plus. This will be referred to as your Notional salary.
You and the Company benefit from paying reduced National Insurance contributions. This is because they will be payable on your reduced salary, not full salary.
With AA Plus, your gross salary is reduced (or exchanged) by the amount of the contributions that you are paying into CARE. The Company will then increase its contribution by an amount equivalent to your salary exchange. Your National Insurance contributions will be reduced, so your take-home pay increases.
AA Plus may not be suitable for everyone. In certain circumstances legislation requires the Company to opt members out of AA Plus e.g. those on maternity.