Pension Scheme Elements

Pension scheme elements need to be created in the system.

Create one element for each scheme that applies to members of your organization:

1. Use the Elements task to create a new element. Click Create.
2. In the Create Element window, complete the fields as shown here:

   PRIMARY CLASSIFICATION	SECONDARY CLASSIFICATION	CATEGORY
   Pre-Statutory Deductions	Pension Plan Pre-Statutory	Benefit
   Voluntary Deductions	Pension Plan After Tax	Benefit

3. Select Percentage deduction for employee and employer contribution rules and enter a rate, although this will ignore the value definition and the CSP value definition will be applied.
4. No pension caps are predefined. You must define these where applicable.
5. Ignore the question on Additional Contribution Rules. Use the new secondary classifications specifically to setup additional voluntary contribution elements.
6. Select Yes to the proration question in the Special Rules section. The proration group is needed for terminated employees whose final close (that is, their calculation card end date) is mid-month. Without the proration group, the pension element entry would not be picked up in payroll processing that month.
7. Select No to the question, Is this element subject to retroactive changes? Corrective retroactive processing is not supported.
8. Select Yes to the question, Is this a Qualifying Pension Scheme? Several further questions are then displayed.
9. Select Civil Service to the employer type question.
10. Select the pension scheme category:
    • Alpha
    • Partnership – Legal & General (voluntary deductions only)
    • Partnership – Prudential (voluntary deductions only)
11. Specify what the retirement age for the scheme is based upon.
    Note: If you have eligible employees aged 75 or over, you must also create a Voluntary Deductions Alpha scheme element.

Create Eligibility:

This allows you enroll an employee into the scheme. It also allows the Pensions Automatic Enrolment process to create a Qualifying Pension Scheme component and associated element entries when the employee is eligible. It is not necessary to define eligibility for the Employee and Employer Contribution elements, as these are indirect elements.

After the questionnaire is submitted, various objects are generated depending on the answers to the questions and the scheme selected:

Summary of Changes Based on the Selected Scheme:

TYPE	NAME	ALPHA	PARTNERSHIP	NOT APPLICABLE
Rate Table Override	Civil Service Employee Pension Rates	Yes	N/A	N/A
	Civil Service Employer Pension ASLC Rates	Yes	N/A	N/A
	Civil Service Employer Pension Partnership Rates	N/A	Yes	N/A
	<Element name> Employer Mini ASLC Percentage	N/A	Yes	N/A
Pensionable Pay Override	Assumed Pensionable Pay	Yes	Yes	N/A
Additional Input Values	Assumed Pensionable Pay	Yes	Yes	N/A
	Permanent Pensionable Pay	Yes	N/A	N/A
	Employer Mini ASLC Amount	N/A	Yes	N/A
	Employer Matching Percentage	N/A	Yes	N/A
	Employer Matching Amount	N/A	Yes	N/A
Additional Balances	Assumed Pensionable Pay	Yes	N/A	N/A
	Permanent Pensionable Pay	Yes	N/A	N/A
	Employer Mini ASLC Amount	N/A	Yes	N/A
	Employer Pensionable Base	N/A	Yes	N/A
	Employer Matching Amount	N/A	Yes	N/A
	CSP Permanent Pensionable Pay	Yes	Yes	N/A
	APP Employer Eligible Compensation	Yes	Yes	N/A
	APP Adjustment	Yes	N/A	N/A
Additional Value Definition	Pension Scheme Category	Yes	Yes	N/A
	Normal Retirement Age	N/A	Yes	N/A
Additional Data Capture on Card	Normal Retirement Date Override	N/A	N/A	N/A
	Transition Date	N/A	N/A	N/A
Additional Component Detail Override	Employer Matching Percentage	N/A	Yes	N/A

Once the element is created, a formula is generated with the rules specific to the scheme being created.

The employee contribution rate for Alpha is calculated by annualizing the CSP Permanent Pensionable Pay for the current period and applying the rate applicable to the relevant salary band.

Whilst the CSP Permanent Pensionable Pay is the basis to determine the tier, the contribution is applied to the actual earnings for the period, including backdated pay awards (the Eligible Compensation balance).

The employer contribution rate is calculated by annualizing the Permanent Pensionable Pay, applying the employee’s FTE that is in effect at the end of the month and applying the rate for the relevant salary band.

• Additional rate definition setup is required to determine the employee’s annualized FTE salary (and therefore the applicable employer contribution rate) for cases where an employee has a mid-month FTE change. See: MidMonth FTE Changes and Employer ASLC Contributions in the appendix for setup information.
• Cases of assumed pensionable pay are automatically detected by looking at absence payment rates. Employer contributions are automatically switched to use assumed pensionable pay.

For Partnership schemes:

• No employee contribution is calculated unless a contribution rate is explicitly entered on the employee’s calculation card.
• Employers can pay up to 3 separate contributions:
  • Employer Partnership contribution – rate based on employee’s age as of 6^th April o Mini-ASLC – fixed contribution rate of 0.5%
  • Matching contribution – where the employee chooses to contribute into the Partnership scheme, the employer can also decide to match the employee’s contribution, up to a maximum of 3%.

All three rates are calculated and displayed in separate input values.

Employer contributions are applied to a specific balance: Employer Pensionable Base.

The following tables summarize the base and rate that is used to calculate employee and employer contributions.

Principal Civil Service Pension Schemes (PCSPS) and Alpha – Employee Contributions

CALCULATION	DEFINITIONS	BALANCE	SUGGESTED FEED
Base	Actual pensionable earnings	<Element name> Eligible Compensation	(Automatic Feed) + Basic Salary + Retro + Pensionable allowances + Retro + Pensionable bonuses + Retro + Absences + Retro
Rate*	Actual pensionable earnings excluding Retrospective changes	<Element name> CSP Permanent Pensionable Pay	(Manual feed) + Basic Salary + Pensionable allowances + Pensionable bonuses + Absences

*The CSP Permanent Pensionable Pay is annualized and rate determined based on salary band.

No proration required as earnings are already pro-rated.

Principal Civil Service Pension Schemes (PCSPS) and Alpha – Employer Contributions

CALCULATION	DEFINITIONS	BALANCE	SUGGESTED FEED
Base	Actual pensionable earnings	<Element name> Eligible Compensation	(Manual feed) + Basic Salary + Retro + Pensionable allowances + Retro + Pensionable bonuses + Retro + Absences + Retro
Rate	Permanent Pensionable Pay	<Element name> Permanent Pensionable Pay	(Manual feed) + Basic Salary + Pensionable allowances* + Pensionable bonuses* + Absences

* Permanent allowances and bonuses only. If in doubt, verify with MyCSP.