Solution Properties
Solution ID:
222001000101765
Last Modified Date:
Fri Mar 22 13:37:00 UTC 2024
Taxonomy Path:
Case category//How do I...//setup/create/run a report
Author:
[email protected]
Stakeholder Pensions
Description

A stakeholder pension is one of the more basic and flexible pension schemes.

Before 1 October 2012:

Employers with five or more employees had to make a stakeholder scheme available. This had to happen within three months of them meeting stakeholder requirements. Some employers were exempt.

 TIP: Since automatic enrolment, it’s no longer a statutory requirement. For more information, please visit the Pensions Regulator Website.

Cause
Resolution

The pension contribution is ultimately tax free. However, the employee must pay tax, which the pension provider reclaims from the HMRC. It gets added to the employee’s pension fund. Employees contributing to stakeholder schemes can have NI categories A, B, C, or J.

You can set up a stakeholder pension deduction in Payroll by following the below steps:

  1. Select the Settings tab. Select Payments & Deductions.
  2. Select the Deductions tab. Select Create New Deduction.
  3. Complete as required, the details below:
Deduction Category Choose Pensions in the drop-down list.
Deduction Type The pension type Stakeholder Pension appears by default.
Name If required, change the deduction name. By default, the name appears as Stakeholder Pension.
Description If required, change the description. By default, the description appears as Government legislated contracted-in pension scheme.
Employee Standard Contribution This option appears after you choose Pensions from the Deduction Category drop-down list.

There are two options:

  • Fixed amount. To contribute a fixed amount each month toward the pension. Enter the amount in the next box
  • Percentage of pay. To contribute a percentage of pay each month toward the pension. Enter the percentage in the next box
Employer Standard Contribution This option appears after you choose Pensions from the Deduction Category drop-down list.

There are two options:

  • Fixed amount. To contribute a fixed amount each month toward the pension. Enter the amount in the next box
  • Percentage of pay. To contribute a percentage of pay each month toward the pension. Enter the percentage in the next box
  1. Select Save.

Adding the deduction

You add this Pension deduction to your employee when you process a pay run.

Removing the deduction

Delete the deduction when you next run the payroll.

  1. From the Edit pay screen, look at the Deduction section.
  2. Select the X to the left of the Stakeholder Pension deduction

The pension deduction is now removed.

To view the pension contributions for a historical period, you can check Section 3 of the detailed payroll report.

 

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Steps to duplicate
Related Solutions

Read the HMRC article Personal Pensions (opens in new tab).