Payroll setup: define pension schemes

Before you can define a pension scheme in the Company Setup Wizard, you must set up the pension scheme with a pension provider. Your pension provider will supply the details that you use to create a record for the pension scheme in Payroll for Microsoft Office Accounting 2008. For more information, see About pension schemes.

When you are setting up payroll in the Company Setup Wizard, you use the Define pension schemes page as a starting point for creating a new pension scheme, editing an existing pension scheme or removing a pension scheme that you no longer use. You can also perform these tasks at any time after you have completed payroll setup. If you do not want to create a pension scheme now, click Next to proceed to the Create employee records page of the wizard. Otherwise, do any of the following:

Create a new pension scheme

  1. Click New.

  2. In the Add Pension Scheme dialog box, under Pension scheme details, do the following:

    • In Name, type a name for the new pension scheme.

    • From the Type list, select the abbreviation for the pension scheme type; for example, type COMP if the scheme is a Contracted-out Money Purchase.

      If the type of pension scheme that you select requires a Scheme Contracted-out Number (SCON), the SCON box will become available.

    • In SCON, type the SCON for your pension scheme, if necessary.

    • Select the Approved pension scheme check box if your pension scheme is approved by HM Revenue & Customs.

  3. Under Supplier, from the Name list, select the name of the pension scheme supplier. If the supplier is not in the list, select Add a new Payroll Supplier, and then add the new pension supplier. For more information, see Add a payroll supplier.

  4. Under Employee contribution, do the following:

    • Next to Method, select either Percentage or Fixed amount, depending on whether the employee's contributions will be a percentage of the employee's pay or a fixed amount.

    • In Default amount, type a percentage or a fixed value, in GBP, that the employee will contribute toward the pension scheme in each pay period.

      Important: An employee who contributes to a Personal Pension Scheme is eligible for tax relief for his or her contributions. Tax relief is applied at the current basic tax rate. For example, if the rate is 22 percent for a specific tax year, every £100.00 contributed to the employee's pension scheme during that year costs the employee only £78.00. The employee receives the tax relief from his or her pension provider. If an employee is eligible for tax relief, configure the employee contribution as a fixed amount and set the amount to 22 percent less than the total amount that the employee wants to contribute. For example, if an employee wants to contribute a total of £100.00 per pay period, you would set the employee's contribution to £78.00, because the pension provider will make up the remaining £22.00.

  5. Under Employer contribution, do the following:

    • Next to Method, select Percentage or Amount, depending on whether the employer contribution will be a percentage of the employee's contribution or a fixed amount.

    • In Default amount, type a percentage or a fixed value, in GBP, that you will contribute toward the pension scheme for the employee in each pay period.

  6. Under Payroll codes, in the Payroll Codes list, select the payroll codes that you want to associate with the pension scheme. A pension scheme must be associated with at least one payroll code. These payroll codes represent employee payments.

    Important: If the employee or employer contribution method is a percentage, the amount is a percentage of the payroll codes that you associate with the pension scheme. For example, if you want the contribution to be a percentage of an employee's total gross pay, you might select the payroll codes Holiday Pay, Commission and Sick Pay (SSP) in addition to Salary and Hourly Pay. If your pension scheme is a contracted-out scheme, an employee can also make an Additional Voluntary Contribution (AVC), which can be made as a percentage or a fixed amount. If an employee is making an AVC as a percentage, ensure that you select all necessary payroll codes, even if the default contribution is a fixed amount.

  7. Click OK.

Edit a pension scheme

If you have already assigned the pension scheme to employees, the types of changes that you can make to the pension scheme are limited. For example, if at least one employee is assigned to a pension scheme, you can change the default contributions, but the changes will only affect employees that you assign to the scheme after you make the change. If a setting cannot be modified because the scheme is assigned to an employee, that setting is unavailable in the Edit Pension Scheme dialog box.

  1. In the list of pension schemes, select the pension scheme that you want to edit, and then click Edit.

  2. In the Edit Pension Scheme dialog box, edit the pension scheme details you want to change.

  3. Click OK.

Remove a pension scheme

You cannot remove a pension scheme if the pension scheme is assigned to employees. If you want to remove a pension scheme, ensure that no employees are associated with it.

  • In the list of pension schemes, select the pension scheme that you want to remove, and then click Remove.


Related topics

Assign a Free Standing AVC Scheme to an employee

Payroll setup: create employee records

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