Pension Contribution Payment Schedule

Description

It is agreed with the pension provider when contributions need to be paid into a scheme. By law, when contributions are deducted from payees, these must be paid over by 22nd of the month or 19th if paid by cheque of the next month.

There are special rules for the first payment of contributions for when payees are automatically enrolled. As payees can opt out of automatic enrolment up to 6 weeks after they have been enrolled (received by the pension provider), employers do not wish to transfer funds until this period has expired to avoid the need of claiming back the refund from the pension provider. The first 3 months of contributions can go into the payment to be made on 22nd of the 4th month after they have been enrolled.

For example:

A payee is auto enrolled in pay period 06/03/2023 - 12/03/2023.

The payee has contributions between 06-03/2023 - 28/05/2023.

These contributions would not need to be paid to the pension provider until 22/06/2023.

Contributions from 29/05/2023 - 04/06/2023 would not need to be paid until 22/07/2023.

In order for the system to know which pay batch of data should be included for the payment due date, a contribution schedule needs to be created.

To set up the contribution schedule, follow these steps:

Step	Description
1	The Payment Contribution Schedule is accessed via Payroll > Maintenance > Pension > Contribution Payment Schedule. Click the Add button. A new screen will be displayed.
2	Enter details into the mandatory fields. Click here to view details of the fields within the header area of the screen. Name A mandatory field. Give the schedule a name. It needs to be unique to any other schedule name created. Frequency A mandatory field. Select the pay period frequency of the pay group that will be using the schedule. Description An optional field. A field to enter further information about the schedule. Last Pay Period End Date A read only field. Display the last pay period end date that was used in generating the output data. Active To indicate if the schedule is active. If unchecked, the schedule will not be visible in the pension scheme maintenance. Import/Export Code An optional field.Free text field to identify codes that are used for any import or export requirements. Once the mandatory fields have been entered, the Add button in the Payment Period Details header is enabled. This is where the dates will be generated based on a set of rules.
3	Click on the Add button. A pop up window will be displayed.
4	Enter the mandatory fields to define the rules for generating the payment due dates for the pay periods. Click here to view the details of the fields in the pop up window Start Date A mandatory field. The first pay period start date from which the system will look for contributions. The system will generate the payment due dates from this pay period to the remaining periods in the tax year. You will need to generate these dates each tax year as part of your end of year routine. Payment Due Date Based on Date Type A mandatory field. To generate the contribution due date for a period, what is it based on. There are the following options to choose from: 1. Days After Contribution Period End Date 2. End of the Contribution Period End Date Month 3. Day of the Month Following Period End For option 1, this is defining that the contribution output will be produced x days after the pay period end date. This should be selected for NOW: Pensions. This is because this provider has only 1 output to capture payees who are on postponement as well as those in a scheme as they produce the communications. Therefore, this output needs to be produced each pay period. For option 2, this is defining that the output needs to be produced for the pay period month. For example a weekly payroll has the following weeks: 3/07/2023 10/07/2023 17/07/2023 24/07/2023 All of these period contributions are for July 2023 and therefore need to be paid over to the provider the following month. This can be selected for NEST. For option 3, this is defining a specific day of the following month of the pay period end date. For example, a weekly payroll has the following weeks: 06/08/2023 13/08/2023 20/08/2023 27/08/2023 These will all be paid over in September on the specified day when Number of Days is populated. If 4 was entered, then these contributions would be paid on 4 September 2023. This can be selected for NEST. Number of Days A mandatory field. This defines how many days after the selected Payment Due Date Based on Date Type should the payment due date be. For the NOW: Pensions, this would be zero as the output should be produced at the period end date. For NEST, you need to review your schedule that has been set up to obtain when you are paying across the contributions. New Enrolments Contribution Due By A mandatory field. Where you wish to delay paying over the contributions for new enrolments, you can specify the payment due date to capture those contributions and delay the details being sent to the provider until such time, thus avoiding the need to wait for a return of funds from the provider. Therefore, the same date as the standard contribution due date must be maintained. The options are: 1. Days After Contribution Period End Date 2. Day of the Month Following Number of Months After Contribution End Date Month For option 1, this is defining that the new enrolments contribution output will be produced x days after the pay period end date. This should be selected for NOW: Pensions. This is because this provider has only 1 output to capture payees who are on postponement as well as those in a scheme as they produce the communications. Therefore, this output needs to be produced each pay period and should not be delayed. Option 2, this is defining a number of days after the normal contribution end date month. You should align this with your normal contributions payment due date. For example, you could specify that any new enrolment contributions are delayed by a month after the normal contribution month. So if pay period end date was 23/07/2023, these contributions were to be paid over by 22 August 2023, where a payee was enrolled in that pay period, their contributions details would be delayed from being output to the pension provider until 22/09/2023. Number of Months This will become enabled and mandatory if option 2 of New Enrolments Contributions Due By was selected. This is specifying the number of months after the normal contribution due date month. This can be set to 0. In which case, there would not be a delay. Number of Days for New Enrolment Contributions This is a mandatory field. This is the number of days after the date determine by New Enrolments Contributions Due by. This can be set to 0.
5	Click OK This will return you back to the Contribution Schedule screen with the Period Details being populated.
6	If the dates generated are as expected, click the Save button to save the changes.
7	If a date needs to be amended, amend the date within the period details screen. The dates are editable where the last pay period end date is prior to the period details start date.

Benefits

This allows a flexibility in defining when data should appear on the output sent to the pension provider.

Configuration

You must have access to the the Payroll > Maintenance area of the system.

A suggested configuration for a NEST submission would be:

Setting	Value	Comment
Payment Due Date Based on Date Type	End of the Contribution Period End Date Month
Number of Days	22
New Enrolments Contribution Due By	Day of the Month Following Number of Months After Contribution End Date Month
Number of Months	1	If you are not delaying your payment of contributions for new enrolments, this would be 0.
Number of Days for New Enrolment Contributions	22	Should match the Number of Days

A suggested configuration for NOW: Pensions csv file generation would be:

Setting	Value	Comment
Payment Due Date Based on Date Type	Days After Contribution Period End Date
Number of Days	0
New Enrolments Contribution Due By	Days After Contribution Period End Date
Number of Months	0
Number of Days for New Enrolment Contributions	0

NOW: Pensions only has 1 output file that contains non-members, members and contributions. Payees who have been auto enrolled cannot be suppressed or delayed from being output onto the report as NOW: Pensions produces the communications and so they need to receive the data straight away.