A tiered, date-effective pension system that calculates contribution rates based on actual earnings is experiencing errors for employees on reduced pay multipliers. This payroll system issue affects the accuracy of pension deductions.
The problem arises when the system incorrectly applies pension calculation bands using inappropriate percentage rates for employees with reduced working hours.
To address this, confirm that the pension bands are configured correctly. This step is crucial to prevent ongoing pension underpayments or overpayments and to comply with pension scheme requirements.
To check the configuration, follow the steps below.
Check the employees' gross details.
Under the timesheets section, you will see the actual pay paid to the employee make sure this is as expected.
Click Settings then under Codes, click Pension Schemes.
From the Pension Code drop-down menu, select a pension scheme.
Click Next Page then check the Banded Scheme Type is set to Tiered Date Effective.
Click Bands then check the correct Earnings Thresholds and Rates are entered.
Ensure the Contribution Rate is set to Actual then click Save.
If this is all as expected, review the employee details by following these steps:
1. Review the employees' gross details.
2. In the timesheets section, confirm that the actual pay received by each employee aligns with expectations.