LGPS Requirements from 1st April 2014

Local Government Pension Scheme

From 1st April 2014 there are a number of requirements which needs to be undertaken to ensure you can administer the LGPS from April 1st.

These are the key requirements, together with how these changes can be implemented within the software.

1. Payroll Record for each job.

Where an employee has more than one job, each job must be held separately on payroll with the ability to hold seperatecumulative pensionable pay figures and employee contributions for each job.

This can be done by creating further scheme definitions for the 2nd (or even 3rd) jobs so that they can be treated independently.

Payroll>Definitions>Module Setup>Pension Scheme

2. 50/50 Contributions.

Where an employee can elect to pay half contributions and receive half benefits.

The 50% contributions can be accommodated in a number of ways, such as:

  1. Create a new scheme which is the LGPS but the % rates are half of the normal rates.
  2. Override the contribution rates on the employee pension record for the existing scheme to be half of the current percentage rate.

3. Pensionable Pay New Definition.

This means that some Payroll Code definitions which were previously NOT ticked as Pensionable will be as of April 1st.

Payroll>Definitions>Module Setup>Payment/Deduction

4. Assumed Pensionable Pay.

This is required in exceptional circumstances and can also already be accommodated:

  1. Use the “Pensionable Gross Pay” value on the Employee Pension record. The system will calculate the contribution based on this value rather than the earnings in the Payroll Working File. If recorded here this will be applied each pay period until it is removed.
  2. Use the “Pensionable Gross Pay” value on the Pension Override record. This acts as above but for the current pay period only.

5.Employee Contribution Rates.

These are used on Pension Scheme definitions instead of the existing values. The scheme definition already accommodates a facility to use the employees Pensionable Gross Pay as an option (or the full-time equivalent pay) so this should be checked for each scheme you have created.

HR Record>Payroll Details>Pensions

6.Employer Contribution Rates.

The Employer Contribution Rate should be adjusted on the employee scheme definition in these scenarios.

HR Record>Payroll Details>Pensions

7.Additional Contributions.

These can already be recorded as Voluntary Contributions on the employee pension scheme definition as described above as an option for the 50/50 requirements.

HR Record>Payroll Details>Pensions

8.Back Pay

As with the “Pensionable Pay New Definition” section, this will require adjustments to some Payroll Code definitions but in this case to signify that they are no longer Pensionable.

Payroll>Definitions>Module Setup>Payment/Deduction