Pensionable Pay

Pensionable pay is defined by the rules of the pension scheme. Typically, pensionable pay is the basic salary, not including elements of your earnings such as bonuses and overtime.

Final Pensionable Pay

The Final Pensionable Pay balance is used to calculate pay for the previous final salary pension scheme. There may be some pensionable earnings that you will want to exclude from the feed if they are not applicable under the rules of the final salary scheme.

The balance is also used to calculate the FTE amount for employees who had membership of the final salary scheme and who are approaching retirement.

Permanent Pensionable Pay

The user-fed Permanent Pensionable Pay balance is used to calculate the basis for the employee contribution tier for regular employees enrolled in the main CARE pension scheme. It is fed by salary and other pensionable regular earnings elements that should be considered when determining the contribution tier. There may be some pensionable earnings that you will want to exclude from the feed if they are not applicable under the rules of the current scheme, for example, certain allowances.

Employee contributions are calculated using bands that are based on the employee’s annual pensionable pay. The Permanent Pensionable Pay balance period-to-date figure is annualized in the payroll process, based on periodicity, to reach that annual figure. The range values in the employee rate calculation value definition are checked against that annual figure and the relevant employee contribution tier (percentage) is applied. Permanent pensionable earnings can vary by month, and so the annual pensionable pay and employee contribution rate will vary accordingly.

Permanent pensionable pay is not used to determine the contribution tier for employees on irregular part-time contracts (PTIC). The balance should therefore not include earnings elements used to pay supply teachers.

Permanent Pensionable Pay is used in the calculation of the basis for the employee contribution tier for absences that are paid at a factor of 1 (100%). You must not feed this balance with the payment or deduction for an absence.

The Final Pensionable Pay and Permanent Pensionable Pay balance feeds may or may not differ. Both balances are required because pensionable pay is reported separately for both the final salary and CARE pension schemes.

Assumed Pensionable Pay

Assumed pensionable pay (notional pay) is the amount of pensionable pay that a member on a certain type of absence would have received if they were not on reduced pay. The user-fed Assumed Pensionable Pay balance is used to determine the employee contribution percentage (tier) based on the member’s earnings prior to any reduction. This protects the member’s scheme pension benefits and ensure that they are not disadvantaged by a reduction in pay during the absence.

See Absences and Assumed Pensionable Pay for details on configuring absences to use the assumed pensionable pay basis.

The earnings feeds to this balance may or may not be the same as the feeds to the Permanent Pensionable Pay and Final Pensionable Pay balances. For example, you would omit from the Assumed Pensionable Pay balance feed an allowance that is part of the member’s permanent pensionable pay but is not paid to an employee when on sickness or maternity leave. You can feed the balance accordingly to meet your business requirements.

Note: You must not feed this balance with the payment or deduction for an absence.

Balance Feeds and Non-pensionable Earnings Elements

If an allowance or other earnings element is non-pensionable, for example, a subsistence allowance, you must remove its balance feed from the <Base Name> Eligible Compensation balance created for the pension scheme in which it is non-pensionable.