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.
In Oracle HRMS, you can set up pension schemes within the following categories:
Private Pension Fund
Voluntary Pension Fund
Supplementary Health Care Fund
This section briefly describes each of the categories listed above.
Employees contribute towards a Private Pension Fund and may be eligible for tax benefits. Employees and employers contribute either a percentage of pay or a flat rate amount to this fund.
Employees can be member of a Voluntary Pension Fund in addition to a Private Pension Fund. Employees and employers contribute either a percentage of pay or a flat rate amount to this fund.
Employee can also be member of the supplementary health care fund. Employees and employers contribute towards the fund either as a percentage or a fixed amount.
In Oracle HRMS, you can set up as many pension types as you require, within the categories described above. For each pension type, you can enter default values for contribution rates.
You can also set up pension providers, which are external organizations that collect the contributions provided by employees and allocate the money to a particular pension. For each provider, you specify a name, location, and the pension types it offers. You can specify that the payment to the provider should be made through a third party. This classifies the organization as a Payee Organization as well as a Pension Provider.
You set up specific pension schemes within a pension type, detailing all the information required for reporting. You can specify if the employer contributes to the scheme.
Contributions are either a fixed rate or a percentage of pay, depending on the scheme rules. These can be overridden at the assignment level. Employees and employers can choose to make voluntary contributions to the Private or Voluntary Pension Fund as Employee and Employer Supplements. These supplements can have a maximum contribution of 10%.
Employers record the information such as employees' names, reason for joining, employer reference number, contribution amounts for employer and employee, and the date contributions start, change, or cease. This information appears on the Employment Certificate Report given to the employee on termination.
Follow these steps if you want to set up pension schemes, enroll employees in the relevant schemes, and process contributions in the payroll run. Use the Pension pages to create pension schemes and types.
UK only: If you are setting up an occupational pension scheme, ensure you have recorded the employer's contracted out number (ECON) in the Tax Details References window for the business group. See: Business Groups: Entering Tax Details, Oracle HRMS Enterprise and Workforce Management Guide
Create a location for each pension provider. See: Setting Up Locations, Oracle HRMS Enterprise and Workforce Management Guide
Enter your pension types. Choose the Pensions option in the Navigator then click on the Pension Types tab.
Enter your pension providers and assign pension types to the providers. Choose the Pensions option in the Navigator then click on the Pension Providers tab.
Important: Use the Pension pages - not the Organization window - to create pension providers, and assign pension types to each provider. The pages provide the required validation.
Generate the payroll objects required for your pension schemes. Choose the Pensions option in the Navigator then click on the Schemes tab.
Link the generated elements. The names of all generated elements begin with the scheme prefix you entered on the Schemes tab.
See: Defining Element Links, Oracle HRMS Compensation and Benefits Management Guide
Review the generated formula(s). Formula names begin with the scheme prefix you entered on the Schemes tab. You can configure the formula(s) and the generated formula(s) result rules, if required.
If you have set up the pension provider as a Payee organization, create a third party organizational payment method, enter it as a valid payment method against your payrolls, and select it as a personal payment method for your employees. In the Personal Payment Method window, you select the pension provider as the Payee for this payment method. See: Entering Payment Methods for an Employee Assignment, Oracle HRMS Workforce Sourcing, Deployment, and Talent Management Guide
If you are using element link criteria to establish eligibility for pension schemes, your setup is complete and you are ready to enroll employees using BEE or the Element Entries window.
UK only: If you are using eligibility profiles to establish eligibility, you must set up a pension plan, and related items, following the usual procedures for Standard and Advanced Benefits.
Ireland only:Before you use your Pension elements and run the Payroll, ensure you specify the balance feeds for the IE Pensionable Pay seeded balance.
You enroll employees in pension schemes by entering the appropriate elements as element entries.
Use the Element Entries window (or Batch Element Entry).
To enroll a person in pension scheme
Set your effective date to the day when the person's enrollment in the scheme should begin.
In the Element Name field, select the element for this pension scheme. Its name will take the form <base name> Employee Pension Information.
Choose the Entry Values button to open the Entry Values window.
Enter the following:
For a percentage-based scheme, this value defaults from the percentage entered while creating the pension type. The employee pays this percentage. You can override the default.
For a flat amount scheme, this value defaults from the value entered while creating the pension type. The employee pays this amount. You can override the default.
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To enable employer contributions to a scheme
Set your effective date to the day when the person's enrollment in the scheme should begin.
In the Element Name field, select the employer contribution element for this pension scheme. Its name will take the form <base name> Employer Pension Contribution.
Enter the following:
For a percentage-based scheme, this value defaults from the percentage entered while creating the pension type. The employer pays this percentage. You can override the default.
For a flat amount scheme, this value defaults from the value entered while creating the pension type. The employee pays this amount. You can override the default.
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To enable employee and employer supplements
Set your effective date to the day when the person's enrollment in the scheme should begin.
In the Element Name field, select the employee's or employer's supplement element. Its name will take the form <base name> Employee Supplement or <base name>Employer Supplement.
Do one of the following
For a percentage-based scheme, this value defaults from the percentage entered while creating the pension element. The employer or employee pay this percentage as a supplement.
For a flat amount scheme, this value defaults from the value entered while creating the pension element. The employer or employee pay this flat amount scheme as a supplement.
Save your work