A.E.Pension
Auto Enrol Pensions
Who you need to enrol depends on both their earnings and age.
Categories of worker relative to age and earnings |
|||
Earnings |
AGE (inclusive) |
||
16-21 |
22-SPA |
SPA-74 |
|
Lower earnings threshold or below |
<- |
Entitled worker |
-> |
More than lower earnings threshold up to and including the earnings trigger for automatic enrolment |
<- |
Non-eligible jobholder |
-> |
Over earnings trigger for automatic enrolment |
Non-eligible jobholder |
Eligible jobholder |
Non-eligible jobholder |
SPA= State Pension Age
Earnings trigger = £10000.00 2014 - 2017
Lower Earnings = £ 5824.00 2015 - 2017
So the person who must be enrolled is the 'Eligible jobholder', ie aged over 22 and under SPA, earning £10,000.00 per year.
The other employees can join the scheme if they wish.
For Non-eligible jobholder the employer must also contribute.
For Entitled worker the employer does not need to contribute.
The employer does not need to organise pensions for employees under 16 or over 74.
Of course the employees can opt out of the pension scheme at any time, if they opt out within 30 days of the scheme going active they can get their contributions back.
They can opt back into the scheme at a later date.
Contributions:
Employer |
Employee |
|
Current |
1% |
1% |
From April 18 |
2% |
3% |
From April 19 |
3% |
5% |
How to use A.E. Pension in CalcPay.
If any employee currently pays a pension please move the pension details from 'Pension1' to 'Pension2' in the 'EmployeeDetails'. This will prevent the entry being over written later. Only 'Pension1' will be used for A.E.pensions.
1) Choose your Pension Provider (PP)
When you sign up to the PP, please make a note of the following items, as they may be required when setting up CalcPay:
Pay Periods. Strongly advise to set these up on a 'TAX PERIOD' option. Some of the PP request the Start and sometimes the End of the Pay Reference Period. CalcPay will work these out for you if you use the 'Tax period' option.
Nest requires you to send in the 'Payment Source' with each communication,
Date of the payment to be made, Nest and others require this, CalcPay will store the numeric day figure, ie payable by 15th will be stored as 15 ( this element still requires to be implemented in Calcpay)
'Employer Pension Scheme Reference' (E.P.S.R.) This is the contract number of the employer with the PP.
Also retain the User id and Password. This will be needed in any 'Web Interface' implemented in the future.
Nest has a facility, 'NEST Connect' which allows an 'agent' to deal with multiple employers.
Peoples Pension has something similar, called a 'SUPER User'.
Nest allows you to send details to them through a 'Web Interface', ie much the same as RTI. CalcPay should have this implemented in Jan 18.
2) 'Employer/EmployerDetails/A.E.Pension', enter the Staging Date, and the Postponement Date if any.
The Start date is the latter of these dates.
3)'A.E.Pension/PensionScheme' find your PP or create a new scheme for them.
Most schemes use the 'Basic Rate Tax Relief' also known as 'Relief at source', this will effectively reduce the employees contribution by the basic tax rate (20%).
Leave the 'Calculate from Pension Income or Gross' as 'P', for pensionable earnings. What income that is to be considered as 'pensionable Income' is displayed in 'Employer/PayHeadings' in the 6th column 'pen'.
'Restrict Pensionable Income to NIC Bands', leave this as 'N' for NIC bands which is the same as 'Qualifying Earnings'. This means that the pension deductions are calculated much the same way as NIC deductions, ie from LEL to UEL. ie 112 to 815 weekly or 486 to 3532 monthly (2016 & 2017 ) This results in a maximum deductions of :
Weekly 815 - 112 = 703 * .8% = £5.62 ee & 703 * 1% = £7.03 er
Monthly 3532 - 486 = 3046 * .8% = £24.37 ee & 3046 * 1% = £30.46 er
The E.P.S.R. is required.
4)'A.E.Pension/EmployeesReview' will review the employees pension status. It does this by calculating the annual pay from the last payrun, which you have entered in 'Last Payment Date' and hit 'Update Grid'.
If there is no last payrun, for instance you are starting in April you will need to do a payrun, BUT click 'AbandonPayrun/GoToMainMenu'. The 'Update Grid via Payrun' will then calculate the annual figures.
The Ages are calculated from the DoB to the 'Start Date'. This information is then reviewed to give the 'Status no', the legend for which is above.
You need to select the PP you are using.
The 'Status no' can be altered, for instance the employee has another eligible pension scheme.
If you are postponing the start you can email / print postponement letters.
You can also email or print the joining letters.
To proceed you need to enter the 'Group Name' then 'Update Records' This will put the Status details into the employee pension details and enter the start date for the 'Eligible Jobholders'.
5) Review the 'Employee/EmployeeDetails/pension1', here you can see the pension details have been entered for you. If there is a 'Joined A.E.' date the pension will be taken off in the next payrun on or after this date. If an employee wishes to subsequently join enter the date into 'Opted into A.E.'
6)You can now prepare the CSV file of the employees details that the PP requires.
'A.E.Pension/AllJoinerReports' will give you a list of currently supported PP.
Click on the PP then 'Proceed'. It will ask for a date, this will be your last payrun date.
If you are doing this in April you will have to do a payrun first.
You will then be presented with all your employees.
Ensure all the employees have been ticked under 'Choose' ( or 'Y') for those that you are sending in.
Review the information, all the data can be changed.
When you are happy with it click on 'Generate File'. This will create the required CSV file in the correct format for the PP.
The file will be saved in the 'pension' folder beneath the year, so for pay17 it will be 'c:\calcpay\pay16_17\pension'.
You can review this data again in a spreadsheet but please be aware that some spreadsheets ie Microsoft Office, will helpfully convert the date formats to ones which it thinks are appropriate!
You now need to login to the PP and find the area that deals with employee import. You can then pickup the file that CalcPay has produced.
7) Do payruns, CalcPay will calculate the appropriate pension deduction in the Payrun.
You should ALWAYS use the 'ProcessPay' and run through all the employees. You may see a message in red in the middle left of the form advising you of a AE Status change. You can change the A.E.Status in the 'Pension' tab under 'A.E.Status'. Otherwise you should postpone this employee. You will need to send the postponement letter to the employee and record the action in the 'Sundry/EmployeeNotes'. The 'Email join details' and 'Email postponement' options will be available later.
You can also start an employees pension here by entering the pre payrun date in 'Opt in to A.E.'
If an employee has opted out you can enter that into the 'Opted out of A.E.' with a date on or before the payrun date.
You need to be notified from the PP of the Optout.
If the employee has opted out within 30 days of the them joining the scheme, they can get their money back. To do this enter the amounts you are returning into the 'This Employee override' as a NEGATIVE for both the employee and employer. This together with an opt out date will refund the amounts, and subsequent payruns will not deduct any pension.
8) Send the contribution file to the PP
'A.E.Pensions/AllContributionReports', Tick the period you wish to deal with, click the Pension Scheme, click 'Proceed. This will take you to the PP contributions review. The choose column will show who you are creating a file for. After you have reviewed the file click on 'Generate File'. This will create the contributions file for the PP, and save it into the 'pension' folder. You now need to login to the PP and find the area that deals with employee contributionst. You can then pickup the file that CalcPay has produced.
Please note that if you have returned an employee's contribution, because they have opted out within the prescribed time, then these deductions cannot be offset against the other amounts that are due.
9) Some PP require you to login to make a 'Approve for payment' instruction.
Peoples Pensions
https://thepeoplespension.co.uk/
They have an initial £500.00 charge but this can be reduced to 300.00 by signing up as Advisers & intermediaries.
or I can give you CalcPays code.
Information:
Quick guide
Suitability report
How Pensionable Income is calculated.
'A.E.Pension/PensionSchemes', 'Calculate from Pensionable Income or Gross' determines what income to use as the Pensionable Income. This can be 'G' for all pay items or 'P' for the pay items that are marked as 'Y' in the 'Pen' column in 'Employer/PayHeadings'. I strongly recommend using 'P' as it gives you a bit more flexibility, for instance if you pay 'Redundancy' you will not want this to be included in Pensionable Pay.
You can also further restrict the Pensionable Income via 'A.E.Pension/PensionSchemes', 'Restrict Pensionable Income to NIC Bands' or Qualifying Earnings. If it is 'N' then it is calculated with respect to the NIC bands only ie Qualifying Earnings. so the first 113/490 (LEL Weekly/Monthly 2017/18) is excluded and restricted to maximum 865/3750 (UEL Weekly/Monthly 2017). Thus the maximum Pensionable Income will be 752 (865-113) 3260 (3750-490) Weekly/Monthly.
https://www.nestpensions.org.uk/schemeweb/NestWeb/public/helpcentre/contents/how-do-i-calculate-contributions-if-i-m-using-qualifying-earnings.html
Banded / Unbanded Earnings is another way to describe earnings, Banded earnings means Qualifying Earnings, whereas Unbanded earnings are all earnings.
The Pension Regulators detailed guide can be found here
Created with the Personal Edition of HelpNDoc: Free Kindle producer