Prorate Assumed Pensionable Pay
When determining the proportion of the annual APP rate to be added to the CPP, the same method used for determining payments for part periods for other reasons should be maintained.
Therefore, if it is necessary to calculate one day’s APP, use whatever method is normally used to calculate one day’s pay from an annual earnings. It is important that the method reflects the methodology used to calculate the annualised APP figure. The examples that follow show how to calculate APP, based on different methodologies:
- APP annual earnings = 3 months’ pay × 12 ÷ 3
- APP monthly earnings = APP annual earnings ÷ 12
- APP daily earnings = APP annual earnings ÷ 12 ÷ number of days in the month
- The workschedule is used to derive the number of working days.
- APP annual earnings = 3 months’ pay × 12 ÷ 3
- APP monthly earnings = APP annual earnings ÷ 12
- APP daily earnings = APP annual earnings ÷ 12 ÷ number of working days in the month
In order to give you the choice of the method, a new component details “LGPS Information” under the component Pensions Automatic Enrolment Additional Scheme Information, has been added.
To select the method:
- Search for the tasks Legal Entity Calculation Cards (to set PSU level values) or Legal reporting Unit Calculation Cards (to set TRU level values)
- Select Public Sector Payroll Information card, component LGPS Information
- On component details LGPS Calculation Information, choose the APP Proration Unit: Daily or Workday.