Solution Properties
Solution ID:
200427112510841
Last Modified Date:
Fri Sep 27 10:46:04 UTC 2024
Taxonomy Path:
Case category//How do I...//setting up
Author:
[email protected]
How to process a pension refund manually through enter payments
Description

There may be times when you need to refund pension contributions manually. For example, if an opt out has been processed but the refund wasn't paid at the time.

Let's look at the steps now.

Cause
Resolution

Check the employee's pension scheme settings

During the steps below you may need to set up a pay element that's pre or post-tax or NI, depending on how your pension scheme works. When you reach this step, if you'd like help with creating this pay element visit our guide on how to set up pre and post-tax and NI pay elements >
  1. Click Company, then click Pension Schemes.
  2. Select the pension scheme assigned to the relevant employee, then click Edit.
  3. Click OK on the message that appears.
  4. On the Details tab of the pension scheme, check for the following:
    • If the Salary Sacrifice check box is selected, the pension was deducted before tax and national insurance (NI). To refund this, set up a pre-tax, pre-NI payment. If this box is clear, continue to step 5
  5. Click the Employee tab of the pension scheme, under the Settings section check for the following:
    • If the Deduct Before Tax check box is selected, the employee's pension contribution deducts before tax and after NI calculates. To refund this, set up a pre-tax, post NI payment
    • If the Deduct Before Tax check box is clear, the employee's pension contribution deducts after tax and after NI calculates. To refund this, you must set up a post-tax, post NI payment
Process the refund with the correct pay element, then complete the section below.

Update pension year to date (YTD) values

After you process a pension refund, amend the year to date values for the pension scheme in the employee's record. This is necessary because since you refunded contributions, the year to date values aren't correct any more.

You don't need to refund Employer pension contribution in Enter Payments. To document the Employer refund in your payroll software, clear or lower the YTD values as applicable. 

 NOTE: Ensure you record the employer refund in your accounting software. 

The steps to follow depend on whether there's more than one pension scheme assigned in their employee record. 

If it's the employee's only pension scheme:

  1. Double-click the relevant employee on your employee list, then click the Employment tab.
  2. Click YTD Values, then click Other YTD.
  3. Under the Pension heading, amend the values in the pension boxes beneath as below:
    • If you refunded all pension contributions, clear the YTD values
    • If you refunded part of their contributions, reduce the values by the amount you refunded
       NOTE: Don't clear any values under the Other heading, as they don't relate to pensions. 
  4. Click Save, then click Close.

If the employee has multiple pension schemes assigned:

  1. Double-click the relevant employee on your employee list, then click the Employment tab.
  2. Click YTD Values, then click Pension.
  3. Amend the valuesfor the relevant pension scheme as below:
    • If you refunded all pension contributions, clear the YTD values
    • If you refunded part of their contributions, reduce the values by the amount you refunded
  4. Click OK, then Save.
  5. Click Close.
You've now processed the refund and the year to date values no longer appear on any payslips or reports.
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