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Tiered pensions - Teachers, NHS and local government pensions

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Summary

How to process tiered pensions in Sage 50 Payroll.

Description

Tiered pension schemes, sometimes referred to as banded pensions, are a form of earnings-related contributions. This means that your pension contribution rate depends on the band, or tier, that your salary falls into.

To help you process tiered pensions in Sage 50 Payroll, we've created some pension packs. These packs contain templates that you can import into your software, which then create the pension bands. These also contain a reports backup which you can restore. This creates the necessary reports without it affecting your current reports.

These packs are only available if you subscribe to the Sage 50 Payroll Pensions Module.

NOTE: Do you operate a tiered NHS pension scheme? If you do, our Pensions Module can help you assess employees' tiers and more. Visit Sage.com to find out more. 

Resolution

Table of Contents

Tiered pension schemes are common in the public sector, for example:

  • NHS, including hospitals, GP and dental practices
  • Education, including schools, colleges and academies
  • Local government pension schemes (LGPS), including town and parish councils

Background information

NHS and Teachers' pensions have operated tiered pensions for several years and the tiers may change each year. Under NHS and Teachers' pension schemes you assess at the start of each year and your annual salary dictates which tier you belong to. The only time your tier changes is if your circumstances change.

LGPS tiers apply from April 2014, with these points:

  • An employer can choose to change the tier you belong to each time you're paid, rather than assessing you once a year
  • An employee can choose to make 50% contributions instead of 100% for a period of time and the employer must record these changes

Local government pension scheme (LGPS)

For more information, visit the LGPS website at www.lgpsmember.org.

The LGPS pension CSV import template contains the following file:

  • PensionSchemesLGPS.CSV - Import template that creates the necessary pension schemes for each band. There's a separate pension scheme for each of the bands, and they start with a reference of 101.

Employer contributions may differ between each region. Check the contribution details for your region and set these correctly within each scheme.

The LGPS pension reports backup contains the following files:

  • Pension Contributions - LGPS.report - Shows a breakdown of current pay, annual equivalent, employee and employer contributions. Based on the employees’ earnings, it shows whether this is the correct band and if not, recommends the required pension band for each employee.
  • Statutory Sick Pay (SSP) Payments - LGPS.report - Shows any employees who are receiving SSP in the current period. If SSP reduced an employee's pay, you're need to make a notional payment of the difference between their actual pay and normal pay. Then, make a manual amendment to the employee's pension contribution to ensure it's correct.
  • Section Movement - LGPS.report - Shows contribution details for employees who have switched from the main section, 100% contributions, to the 50/50 section, 50% contributions. Inform your pension provider of these changes.
  • Pension Contribution Breakdown - LGPS.report - Shows a breakdown of contributions over the specified period.

     

NHS

For more information about NHS pensions, go to nhsbsa.nhs.uk/pensions.

The NHS pension CSV import template contains the following file:

  • PensionSchemesNHS.CSV - Import template that creates the necessary pension schemes for each band. There's a separate pension scheme for each of the 7 bands, and they start with a reference of 101

The NHS pension reports backup contains the following reports:

  • Pension Contributions - NHS.report - Shows a breakdown of current pay, annual equivalent, employee and employer contributions. Based on the employees' earnings, it shows whether this is the correct band and if not, recommends the required pension band for each employee
  • Pension Contribution Breakdown - NHS.report - Shows a breakdown of contributions over the specified period

NOTE: Alternatively, if you subscribe to the Pensions module, you can use this to set up and process NHS Pensions. Read more > 

Teachers' pension

For more information,  go to teacherspensions.co.uk.

The teachers' pensions CSV import template contains the following file:

  • PensionSchemesTeachersApril20223.csv - includes the required data to set-up the 6 tiered pension schemes when you import it

NOTE: The CSV file uses references 1-6 by default. If they're not changed, this will overwrite any existing pension schemes with these references.

The teachers' pension reports backup contains the following reports:

  • Pension Contributions - Teachers' Pension.report - Shows a breakdown of current pay, annual equivalent, employee and employer contributions. Based on the employees’ earnings, it shows whether this is the correct band and if not, recommends the required pension band for each employee. This is a pre-update report
  • Pension Contribution Breakdown - Teachers' Pension.report - Shows a breakdown of contributions over the specified period. This is a post-update report

All reports appear in the User Defined (Local) folder in the software.

Download pension packs

  1. Access the required link below.
     NOTE: You must log in to view this page. To do this, enter your email address and password for the Sage website, then click Log in.
  2. Click Download.
  3. From the File Download window, to save the update to your computer, click Save.
  4. From the Save As window, browse to and select the required destination, for example your Windows desktop or your Downloads folder, then click Save.
  5. Once the download is complete, click Close.


LGPS

Access the below links for the LGPS reports and import template:


NHS

Access the below links for the NHS reports and import template:


Teachers pensions

Access the below links for the teachers' pension reports and import template:

Import the CSV file

  1. Click File, then Data Import.
  2. Click Import Sage Payroll Data.
  3. To take a backup of your data, click Backup, then follow the on-screen instructions.
     TIP: Take a backup means that, if required, you can remove the imported data by restoring the backup.
  4. Select Company Pensions Scheme, then click Next.
  5. Click Browse, then browse and locate the import file.
  6. Select the import file, then click Open. 
  7. Ensure the Path box displays the correct file and location of the import file, then click Finish.
  8. Click Close.

For more information on how to import data, visit our import data guide.

Now assign the correct pension scheme to your employees based on the relevant band. For help with assigning the schemes, visit our add a pension scheme to an employee's record article.

Restore the reports backup

  1. Click File, then Restore, then Next.
  2. Deselect Data Files, select Reports Files, then click Next.
  3. Click Browse, then browse and locate the reports backup file. 
  4. Select the backup file, then click Open.
  5. Click Next, then Finish.

Once the restore is complete, enter your normal Sage 50 Payroll login details.

Run the reports

Pension Contribution Breakdown

This report is a post-update report. This means you run it once you've updated the pay period.

  1. Click Reports, then User Defined (Local).
  2. Highlight the 'Pension Contribution Breakdown' report, then click Preview.
  3. Enter the required data range for your report.
  4. Click OK.

Other reports

The other reports in the pack are pre-update reports. This means you run them before you update the current period.

  1. On your employee list, highlight the required employees.
  2. Click Payroll, then Pre-update reports.
  3. Click User Defined (Local).
  4. Highlight the required report, then click Preview.

Upgrading your licence

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