Description

FastTrack360 has the capability of operating salary sacrifice pension schemes for Nest Provider. Once the scheme has been configured, the system will:

In the pay batch when the payee reaches the National Minimum Wage stage, it will:

Assess if the payee has a sacrifice scheme and whether applying it will make them fall below their NMW pay rate minimum.
If there is no breach it will:
- apply a sacrifice within the Pay Item stage.
- users can see the pensionable pay within the net deduction stage. This is a read only value and cannot be changed where a sacrifice has occurred.
- apply the sacrifice within the wage cost stage and display that as a separate field to the actual employer contribution
- the actual employer contribution will be applied as normal

figure 1:Pay Batch Pay Item

figure 2: Pay Batch NMW Stage with salary sacrifice

If there is a breach, in any of the worked periods being processed in the processing period,
- the sacrifice will be displayed in the NMW worked period to illustrate why a breach has occurred but will not get applied to the Pay Batch Item
- a comment will be added to the NMW section in the worked period affected stating the reason for the breach
- a comment will be added to the calculation report to advise that a breach has occurred and that a net deduction has been applied
- it will apply the pension as a net deduction.
- it will apply the employer contribution rate as normal

The Payee Pension Contribution report displays a separate column with the sacrifice element

In the payslip output:

the salary sacrifice will be displayed in the pay item
the sacrifice contribution will be shown in a separate line in the employer contribution section

In the payee screen:

YTD figures section, the sacrifice contribution will be available to see the YTD value for each tax year.

Benefits

Offers customers who use Nest pension provider to operate a salary sacrifice pension scheme.

Configuration

Pay Code Configuration

The system needs to know what pay code should be used to apply the sacrifice element in the pay item stage of the pay batch. Follow these steps to create a salary sacrifice pay code:

Step	Description

Step	Description
1	Go to Rates & Rules > Maintenance > Pay Code and add a pay code.
2	Apply an appropriate name for the salary sacrifice pay code for the pension salary sacrifice. This is what will be shown in the payslip.
3	Apply the pay code type of Ordinary.
4	Check the Salary Sacrifice check box
5	Save

Pension Scheme Configuration

As this is new functionality, you will not have an existing scheme that is of salary sacrifice type. You should not be amending an existing scheme to change it to salary sacrifice. To set up a salary sacrifice scheme, the pension provider would need to be set up. If a pension provider is still pending creation, please refer to How to Create a Pension Provider. Follow these steps to create a salary sacrifice pension scheme:

Step No	Description

Step No	Description
1	Click Add Pension Scheme
2	For the salary sacrifice scheme itself, check the Salary Sacrifice checkbox. If it is not enabled, this means that you have not selected an output management provider that we cater for salary sacrifice. At the time of this release, this will only be available for Nest.
3	If a payee breaches NMW, the contributions are automatically moved to a net deduction. Nest requires that this is a different pension group. You should apply the name of that non-salary sacrifice scheme into the field Non Salary Sacrifice Scheme Name and it must match exactly to the name set up in your Nest portal.
4	As the sacrifice element of the contribution is displayed separately on the payslip for the employer contribution to the actual employer contribution, it requires a description to output onto the payslip. The default of Sacrifice Contribution has been supplied but can be changed to your preferred description.
5	Click Add Validity
6	The following is in addition to how to set up a pension scheme validity. Please refer to this link for the other fields in this screen: Pension Deduction - Although the sacrifice affects taxable pay, the system still requires the rules as to how the contribution should be calculated. Therefore, a pension deduction header record should be selected. If a sacrifice contribution cannot be taken, this means a net deduction would need to be taken instead. Therefore, when setting up the pension deduction, the Deduct From would need to be set as Net. The system will not allow you to apply a gross deduction. Salary Sacrifice Pay Code - Set the pay code on which the salary sacrifice should be applied against in the pay items. Please refer to Pay Code Configuration
7	Save your changes.

Contribution Payment Schedule

Where there is a salary sacrifice and a net deduction scheme that a payee maybe transferred to, both schemes must be on the same payment schedule in the Nest portal. Otherwise the transfer from 1 scheme to another cannot be applied.

FastTrack360 Online Help

Salary Sacrifice Pension Scheme - Nest Provider