References

Use this tab to specify the following pension scheme details.

Pension Scheme

Type a unique code to identify the pension scheme. You can enter a maximum of 10 characters.

Description

Type a description for the pension scheme. This description is displayed on enquiries, reports and lookup lists. You can enter a maximum of 40 characters.

Scheme Reference

Optional. Type the reference for the pension scheme. This is the reference notified by the pension scheme provider.

Year End

Type the end date of the pension year, or select it by clicking . The pension year end date might be different from the payroll year end date. This date is important for reporting on pension contributions in the pension year, which can cross payroll year boundaries.

Pension Code – Employee

Optional. Type a reference that is used as a default for each employee associated with this particular pension scheme. You can amend it for individual employees in their pension records and it is only used for presentation purposes on reports and so on. You can leave this field blank and record the reference in the employee’s pension record.

Pension Code – Employer

Optional. Type a reference that is used as a default for the employer reference. You can amend it for an individual employee in their pension record and it is only used for presentation purposes on reports, and so on.

Rate Type

Select one of the following:

  • Standard RatesSelect this to define the pension scheme as a standard rates type of pension. In a standrad rates scheme, employee and employer contributions are a standard rate, typically a percentage of the employee’s pay, and/or a value.
  • Contribution BandsSelect this to define the pension scheme as a contribution bands pension. In a banded scheme, the pension contributions employees make depend on the following:
    • the employee’s income and the pay band into which the employee’s income  falls
    • the band method, which determines how the system identifies the pay band for the employee, which it uses to determine the employee’s pension contribution
    • the band reference, which determines the value the system uses to determine the band

The Band Method and Band Reference fields are available only when you set Rate Type to Contribution Bands.

Band Method

This field is available only when you set Rate Type to Contribution Bands.

Select one of the following:

  • Each CalculationSelect this method to calculate the employee’s pay each month, and determine the pay band into which the employee falls, to determine the pension contribution percentage. This means that if an employee’s earnings vary in each pay period, the pension contribution also fluctuates.
  • Fixed UpdateSelect this method to fix the employee’s contribution at a specific percentage throughout the year. Typically, once every year, after you update the pay bands in the pension scheme definition, you should run the Pension Rate Changes wizard to perform the fixed update. When you run the wizard, the system uses the crieria you specify on the pages in the wizard. The system refers to the selected pension scheme definition, the selected HR query to identify the employees’ pension records, and either the current salary or the previous pensionable pay. For each employee identified by the query, the system determines the pay band into which each employee falls, and the percentage for that band defined in the pension scheme definition. Each employee’s pension record is updated, and the system uses the contribution percentage for the employees throughout the year, until the next update. Note that the wizard does not update an employee’s pension record whose Fixed field is set to Yes.

Band Reference

This field is available only when you set Rate Type to Contribution Bands.

Select one of the following, to determine the value the system uses to determine the band:

  • Pensionable PaySelect this to use the employee’s pensionable pay to determine the pay band.
  • WTESelect this method to use the whole time equivalent (WTE) to determine the pay band. For example, if an employee works two days a week, and earns £1000 a month (£12,000 a year), their WTE is £2500 a month or £30,000 a year. If an employee decides they do not want to pay contributions based on the WTE for the pension scheme, you can override the setting in the pension scheme by setting  Band Reference to Pensionable Pay in the employee’s pension record.

For information about the details you enter on the Values tab, click here.