In most countries, deductions for savings and retirement receive favorable tax treatment and special rules apply. You set up these deductions within the appropriate element classification, such as Pre-tax or Voluntary Deductions.
In some localizations, you can use a template to generate all the components you require for your pension or savings schemes, such as elements, balances, and formulas. There are predefined pension extract definitions to assist you to extract the data you may require to send to third parties. You can run these predefined extracts or use them as a model for designing your own.
For Hungarian users:
In Hungary, use Oracle HRMS to set up pension schemes available for your employees. By setting up pension providers as external organizations you collect employee and employer contributions and allocate the money to a particular pension. You can also specify payment to the provider should be made through a third party.
You can set up as many pension schemes as required within the following categories - Private Pension Fund, Voluntary Pension Fund, and Supplementary Health Care Fund. Both employees and employers can contribute either a percentage of pay or a flat rate amount to each of these funds, depending on the scheme rules. Employees and employers can also choose to make additional voluntary contributions, up to a maximum of 10% towards these funds. You can override the default contribution values at the assignment level.
For Irish users:
Use Oracle HRMS to set up pension schemes available for your employees. You can set up pension providers as external organizations to collect employee and employer contributions and allocate the money to a particular pension. You can set up as many pension schemes as required within the following categories – Retirement Benefit Scheme, Retirement Benefit Scheme Additional Voluntary Contribution, Personal Retirement Savings Account, Personal Retirement Savings Account Additional Voluntary Contribution, and Retirement Annuity Contract. Both employees and employers can contribute either a percentage of pay or a flat rate amount to these funds, depending on the scheme rules.
For UK users:
In the UK education sector, you can use predefined system extract definitions to create the reports required by the Teachers Pension Agency in England and Wales. Similarly, in the local government sector, you can use predefined system extract definitions to create files for transfer to Lynx Heywood pension administration systems (Class CPX and AXIS).
For US Users:
In the US you can generate all the elements, balances, and formulas you require to process deferred compensation plans and tax-sheltered annuities. For each plan you specify whether employees can make after-tax contributions as well as pre-tax deductions. You also specify whether employees can make Catch-up contributions (to continue contributing when they have reached the base plan contribution limit).
You can also set up State Retirement System plans, by initiating deductions in the categories "Defined Benefit Plan" or "Defined Contribution Plan".
You can use predefined system extract definitions to report on retirement plans and contributions to deferred compensation plans and tax-sheltered annuities (401K, 403b and 457 plans). You can also make copies of the seeded pension extracts and modify them to add your own data elements and layout as required by each of the pension providers.
For Netherlands Users:
In the Netherlands use Oracle HRMS to set up the pension and savings schemes available to your employees. For employees in the government and education sectors, you can set up pension schemes offered by ABP (Algemeen Burgerlijk Pensioenfonds).
A pension provider is an organization that collects contributions provided by employees to their employer and then allocates the money to a particular pension or savings scheme. In Oracle HRMS you can assign as many pension types as you require to each pension provider, then select these for your employer organizations. The pension type defines how contributions are calculated, and this information is datetracked.
Oracle HRMS supplies a predefined report to extract the data required for the monthly notification on ABP pensions. You could also use or adapt predefined global pension extracts to report on other pensions and savings data, as required. By default the NL HRMS Reports & Process request set does not include the global extract processes, but you can add them.
KiwiSaver is a voluntary, work-based savings initiative that helps employees with their long-term savings for retirement.
Employers and employees can contribute to the KiwiSaver savings scheme. When you hire an employee, you enroll the employee in the KiwiSaver scheme and complete the Assignment Element Entries for the KiwiSaver Information element. Later, at the employee's request, you can cancel the enrollment in the savings scheme.
The minimum contribution amount to the KiwiSaver is 2% and the maximum contribution amount is 8%. This can be through employee only contributions, employer only contributions, or a combination of both employee and employer contribution amounts.
Employers contributing towards the KiwiSaver on the employee's behalf are eligible for an exemption on the Employer Superannuation Contribution Tax (ESCT, previously SSCWT). This exemption is limited to the lesser of the employee's contribution or 2 % of the employee's gross salary or wages.
Employers report and submit the KiwiSaver contributions and deductions to the Inland Revenue Department (IRD).
Compulsory Employer Contributions (CEC)
KiwiSaver Deductions are mandatory for the employers if the employee makes contributions to KiwiSaver greater than 2%. These mandatory contributions are called Compulsory Employer Contributions (CEC). The amount is 2% of gross.
Employers can contribute to KiwiSaver or they can contribute to a complying fund or they can contribute to both. If total CEC is not 2% then it will be adjusted in CEC KiwiSaver.
Oracle HRMS for New Zealand provides element, balances, and balance dimensions to enable you to process and calculate these KiwiSaver deductions.
See: Predefined Elements
See: Setting Up KiwiSaver Deductions
Perform the following steps to set up the KiwiSaver element so you can process the KiwiSaver deductions and report employer contributions and employee deductions to the Inland Revenue (IRD):
Attach an assignment to the employee.
See: Entering an Assignment, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide (New Zealand)
Attach the assignment to the employee's payroll.
See: Entering an Assignment, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide (New Zealand)
Enter the legal employer details in the Statutory Information tab.
See: Entering Additional Assignment Details, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide (New Zealand)
Add the KiwiSaver Information element to the employee.
See: Defining an Element
Enter the values for the employer and employee contribution rates.
Run payroll.
See: Starting a Payroll, Oracle HRMS Payroll Processing Management Guide (New Zealand)
Oracle HRMS for New Zealand supports retro payments of KiwiSaver Contributions. You can retrospectively pay employees using Enhanced RetroPay.
To process retro KiwiSaver Contributions
To enable you to retro process these contributions, Oracle provides the following predefined retro elements.
Retro KiwiSaver Employee Contribution
Retro KiwiSaver Employer Contribution
Retro ESCT Deductions
Retro ESCT Exempt KiwiSaver Contributions
Retro CEC KiwiSaver
Retro CEC Complying
Retro Employer Super Contributions. This is an information element.
The predefined Retro Components and Retro Elements are available.
| Element | Component | Reprocess Type | Default Component | Time Span | Retro Element |
|---|---|---|---|---|---|
| KiwiSaver Employee Contribution | Backdated Changes | Reprocess | Yes | Start to End | Retro KiwiSaver Employee Contribution |
| KiwiSaver Employer Contribution | Backdated Changes | Reprocess | Yes | Start to End | Retro KiwiSaver Employer Contribution |
| SSCWT Deductions | Backdated Changes | Reprocess | Yes | Start to End | Retro ESCT Deductions |
| SSCWT Exempt KiwiSaver Contributions | Backdated Changes | Reprocess | Yes | Start to End | Retro ESCT Exempt KiwiSaver Contribution |
| CEC KiwiSaver | Backdated Changes | Reprocess | Yes | Start to End | Retro CEC KiwiSaver |
| CEC Complying | Backdated Changes | Reprocess | Yes | Start to End | Retro CEC Complying |
| Employer Super Contributions | Backdated Changes | Reprocess | Yes | Start to End | Retro Employer Super Contributions |
Ensure that the Event Group - NZ Retro Event Group is attached to the predefined KiwiSaver Information element and it has the following entries:
| Update Type | Table | Column Name |
|---|---|---|
| Datetrack Insert | PAY_ELEMENT_ENTRIES_F | N/A |
| Datetrack Delete | PAY_ELEMENT_ENTRIES_F | N/A |
| Datetrack Update | PAY_ELEMENT_ENTRIES_F | EFFECTIVE_START_DATE |
| Datetrack Update | PAY_ELEMENT_ENTRIES_F | EFFECTIVE_END_DATE |
| Datetrack Correction | PAY_ELEMENT_ENTRY_VALUES_F | SCREEN_ENTRY_VALUE |
Run Payroll.
Make retrospective changes.
Run RetroNotifications Report.
Run Enhanced Retropay.
Ensure that the elements are carried forward in the current month.
Run Payroll for current month.