Pension Payroll Processing


The features found in Reports, Gross Pension are used in 2 ways:

1.     if you subscribe to Omni’s PAYE module and are checking the gross pension amounts before applying PAYE or

2.     you use another PAYE system and need to collate the gross amounts before running the other software


If you subscribe to the Omni PAYE module then the Reports, Gross Pension screen will only allow you to produce a report (the options for processing transactions or reversing them will not be shown).


Payroll Schedule


Once all of the data has been amended for all members in the Omni database (including suspensions and adjustments for the month), the 'Payroll Schedule' can be produced using ‘Reports, Gross Pension’.


If a member is not paid monthly, a rebate can be generated in tax month 12, by ticking the box on the Payroll tab of the Members, Pensions screen.


If the latest ‘Planned Payments’ date is after the 28th of the processing month (i.e. a future Planned Payment date has been entered) then the previous record is used.


If the 'Date Pension Ceased' for the member is not blank or the 'Pension Suspended' field is ticked, then the member will be excluded from the list.


The spreadsheet contains a separate worksheet for each payroll. Each listing shows the bank account from which the pension will be funded (with account number).


The last worksheet also has a list of all members whose pension has been suspended.


As a check, there is a 'Change' column on each worksheet which provides the change between the previous pension payment for that member and the proposed payment, if the payroll is operated on a gross basis. The intention is that any non-zero amounts can be checked against a list of expected changes to see whether the database has been changed correctly. This check will not operate if the payroll operates on a split basis (with separate payments from the bank account for net pay and PAYE) because the tax that will be deducted is not known at this stage. When running the PAYE report, the tax being deducted is checked against the previous period’s tax, to achieve the same check.


The Balance column shows the balance on the bank account that will pay the pension, allowing for expected transactions that are expenditure but not expected income.


As a warning, there is a ‘Low Balance’ column that shows ‘Low Balance’ if the calculated bank balance is less than the pension payment due (2 months worth, if payments are monthly).


As a warning there is a column headed 'Age near 75'. This will include a message of 'Age = 74' if the member will have reached the 74th birthday on the process date. The intention is that the warning will start to be shown a year before age 75 because the member may want to increase the pension before age 75 (as well as having to reduce it after age 75). This increase is an option because the part pension year up to the 75th birthday is treated as a full year for pension limit purposes e.g. if a member's pension year starts on 1st March 2008 and the 75th birthday is 31st May 2008 then a full year's pension can be paid in the 3 months from 1st March to 31st May 2008. It will continue to show the age when the member passes age 75. 


Checking Pension Limits. There are 4 columns which provide a check of the actual payments against the limits:


The ‘Limit Year Starts’ column is the anniversary (immediately before the Pay Day) of the date of the latest pension limit record. Omni finds the limits for each arrangement separately (pre 2006, normal and transfers in drawdown). If the latest pension limit year for all of a member’s arrangements are the same then the limits will be added across all of those arrangements and shown as a total in the ‘Limit’ column. If the pension limit years do not coincide, The ‘Limit Year Starts’ column will show ‘Mixture’ to indicate that there is a mixture of dates. The user will also see a warning on the screen to say that an individual check will be needed where the years do not coincide (using the Scope button on the Pension Limits tab of the Members, Pensions screen). If there is a pension limit record with a date after the Pay Day, Omni will ignore it on the basis that the limit has been recalculated using the 60 day window and the limit does not yet apply.


The check is against the overall total pension across all arrangements for each member because Omni does not definitely know how you will allocate the proposed payment across the member’s arrangements. If you want to analyse each arrangement individually then the Scope button (mentioned above) should be used.


The ‘Proposed’ column shows the total of all pension payments already paid in the current pension limit year plus expected transactions not yet paid but due for the current year (e.g. tax due to be paid) plus the amount proposed for the current payroll run. To determine whether a payment relates to the current pension limit year, the Pay Day field (in the grid on the Benefits tab of the Members, Pensions screen) is used. This is particularly important for tax payments. For example, if the pension limit year starts on 1st May and tax is paid on 16th May for the payroll run at 9th April then Omni will exclude that tax payment for the current year as long as the Pay Day for that tax payment has been entered. If the Pay Day is left blank, Omni will use the ‘Date’ column because there is no other information – this is likely to give wrong results and so the Pay Day needs to be entered for each payment. 


The ‘Free Scope’ column shows the difference between the limit and the ‘Proposed’ amount. This column should be checked for any negative numbers (which indicate that the limit will be exceeded if the proposed amount is paid). If the limit has been exceeded the user will see a message.


Processing Payroll


This is only available if you do not subscribe to the PAYE module and should only be run if the gross pension is deducted from the scheme bank account (rather than tax and net pay being deducted separately).


Once the listing has been checked it can be passed to the payroll department as a definitive list of the gross amounts to be applied to the payroll program. At the same time the report can be re-run using the option of processing the payments. This process involves:


1.     creating the bank transactions (allocated to the appropriate scheme, members and the chosen bank account)

2.     post the bank transactions

3.     import the transactions to the Pension Payments table on the 'Member, Pensions' screen.


No additional data is needed (apart from user entering the processing date).


The bank transaction is created in the account selected as the ‘Paying Bank Account’ on the ‘Basic data’ tab.


If there is only one non-archived bank account for the scheme then the bank account transaction is created in that account – there is no need to select the account on the Members, Pensions window but it is probably clearer.


If there is no bank account for a scheme then the program will display a message and the user will have to deal with the transaction manually.


There is a facility to reverse the process if an error is made but is recommended that the records are processed only when the data has been thoroughly verified.  The processing can only be carried out by a user with the necessary rights. This will reverse bank transactions and benefit payments for all members across all payrolls/departments. You can’t reverse one department in isolation. Once the payroll records have been reversed it may not be possible to recreate the original records – any database changes made between the first processing and the second processing can affect the results. It is recommended that the payroll is only reversed shortly after the original processing and then with very great care and thought.


If there are Extra Arrangements, extra lines are shown.


See also –             Pension Data.

                                Extra Arrangements