The pension processing within the software has evolved to attempt to cover the requirements of the LGPS Pension Scheme.
One of the changes that has been implemented has been where, if an employee has multiple roles, each of those roles can be pensioned separately. This is particularly beneficial where differing percentages need to be applied.
The percentage of pension to be applied is currently taken from the salary, calculated as follows:
- Actual Salary = (A * B * C) / (D * E)
- A = Employee’s Full Time Salary
- B = Employee’s Hours Per Week
- C = Employee’s Weeks Per Year
- D = Full Time Hours Per Week (Note: as held on the Whole Time Equivalent record)
- E = Full Time Weeks Per Year (Note: as held on the Whole Time Equivalent record)
Full Time Salary (A) = £19364. Employee works 41.2 weeks of a 52.143 week year, and 7 hours out of a 37 hour week.
Therefore the Actual Salary calculates is:
- (19634 * 7 * 41.2) / (37 * 52.143) = 2934.99
To calculate the Pensionable Salary, the reversal is applied as follows:
- A = (Actual Salary * D * E) / (B * C)
- A = (2934.99 * 37 * 52.143) / (7 * 41.2)
- A = 19634
If an employee is a Term Time Only employee, then the employee’s salary is being calculated correctly.
However, the calculation for the Pensionable Full Time Salary is not correct.
The calculation for the Full Time Salary for Term Time Only employees is:
- (Actual Salary * D) / B
- (2934 * 37) / 7 = 15513.51
A marker be held against the Whole Time Equivalent file, to show which WTE codes are to use this new equation and to have the Pension Percentage Calculation programs amended accordingly.
(Note: This has now been implemented in the software).