I guess we weren’t the only ones bothering SAP support about the inadequate solution of the monthly minimum check for pension contributions under Pension Auto Enrolment (PAE). Finally, SAP provides some solution.
For many schemes, monthly checks didn’t make any sense, because different thresholds and consideration of one-off payments pass the annual check, but make a monthly one bound to fail ever so often. So far, the suggested solution was to set the scheme type to blank, but that’s a poor workaround, as these schemes usually are defined contribution schemes and should be marked as such.
SAP note 1989332 provides a new option now. For each scheme, you can decide, whether the monthly check is to be performed and if it is, whether a failure should lead to a warning or an error:
The note also gives you the choice, whether you want upper and lower limits to be taken from first or last day of the month or pro-rated. Something that becomes relevant, when limits change mid month, as they do on 6th April.
The note requires quite a few manual activities, if applied with SNOTE. So, wait for the respective support package (A7, 73, 01), if you can.
The new check against minimum contribution is definitely an improvement, but still not perfect. With the monthly check switched off, you need a custom solution for the annual check. And there’s still no easy standard solution for schemes on variable pensionable pay qualifying based on the 85% rule or schemes with a reduced EE contribution from a net deduction, where the scheme provider claims the top-up directly from HMRC. SAP doesn’t seem eager to provide easy solutions for this, but in case of the annual check, it might be worthwhile waiting, if you still have a few months to go before your first PAE-year-end. It’s always annoying, if you invest time – even if it’s just a day or two – in a custom solution only to see SAP provide a standard solution in time.
If you require any help with PAE or other optimisation work on HR and UK payroll, just get in touch.
