4. Creating Pension Pay Elements

If you’ve already got your pension pay elements set up, you can skip ahead to steps 2 and 3. If you aren’t currently using a pension and need to create new pay elements. Please follow the steps below:

Step 1 - Creating Pension Pay Elements

Step 2 - Updating AVC (Additional Voluntary Contribution) Pay Elements

If you have existing pension pay elements for an additional voluntary contribution by your employees into a pension you will need to update them to indicate that they are an AVC. 

Step 3 - Checking Your Pensionable Pay Element Settings

The earnings to be used for calculating secondary pensions will be the same as the ones you use to calculate social security contributions.

These will include commission, bonuses, overtime payments and other such remuneration, for example tips collected by the Employer and shared out. The contributions should be calculated based on all the earnings up to the Upper Earnings Limit and will include and earnings below the Lower Earnings Limit.

Next Steps: You can now use our enhanced Pensions Reporting to help with internal processes and report contributions to your pension provider. Our enhanced pensions reporting allows you to see a breakdown of employee’s pension contributions into the various providers and schemes you have created.

The Secondary Pension Summary provides a summary of all contributions reported in the secondary pension report.