Setting up a pension scheme in the back office is essential for ensuring that employees have access to retirement savings options that comply with regulatory requirements.
Establishing this scheme within payroll allows automatic deductions from employee wages and facilitates employer contributions.
Pension schemes must be set up based on the applicable pension rules within the organization. These schemes may include Additional Voluntary Contributions (AVC) or AVCs may be set up as a separate scheme.
To set up a pension scheme, follow the steps below.
Click CorePay then click Reference.
Click Pension Scheme, then in the Pension scheme code field, enter a unique numeric code.
In the Description field, enter a description for the pension scheme.
Fill the following fields:
Company: Enter the the relevant pension company.
Pension Scheme Type: Select either Group Defined Benefit Scheme, Group Defined Contribution Scheme or Other Scheme.
Renewal Period: his defaults to 1. If you want renewals to occur at the start of each tax year, enter 1. If you want them to renew in period 40, enter 40.
Deduction Percent EE 1 to 3: This applies if the pension is calculated as a percentage of the employee's pensionable pay. Fixed values can also be accommodated. You can break down a percentage calculation into three different percentages for employee deductions.
Note: The employee pensionable pay includes all pay where the Pensionable Employee Indicator is set to Y on the pay code.
Social Welfare Deduction (1 - 3): If a social welfare deduction applies, enter Y. This is relevant to percentage contributions only and means that the applicable old age pension rate is deducted from the employee's pensionable pay before applying the specified percentage.
Deduction Percent (ER): Enter the percentage which the employer will contribute.
Override Scheme: Set to Y if percentages may be overridden at the employee level. If you enter N here, the specified percentages for this scheme cannot be changed at the employee level.
Employee Pay Codes: Typically, these are defined as part of the reference data setup. Ensure that the pay codes are established before setting up the pension scheme.
To save changes, click save
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