What to do when pay elements aren't defined transcript
What to do when pay elements aren't correctly defined.
Another error we see is where pay elements have not been correctly identified as being qualifying earnings, pensionable or both.
Qualifying earnings are defined as; salary, wages, bonus, overtime, commission, statutory payments, and any item of pay that would fall into these categories.
The employer needs to review all their elements of pay that make up gross and determine which ones are qualifying earnings and which ones are pensionable, some will be both.
In conjunction with your client please ensure that all their pay elements have been correctly classified. If you find an error, then as before please speak with your client and the pension provider and establish the steps to rectify the problem.
Such as correcting the error going forward, working out how far back the problem goes, working out who is affected, and what the amounts are. It is important to communicate with affected staff.
Where some pay elements have not been correctly identified as pensionable, the employer, with your help needs to look back over payroll records and calculate any underpayment of contributions and arrange to pay the amounts over to the pension scheme as soon as reasonably possible.
Where the employee owes contributions, we would look to the employer to pay these, or as a minimum the employer should enable the arears to be paid in instalments.
Where some pay elements have not been correctly identified as qualifying earnings, the employer with your help, needs to look back over the payroll record and reassess any worker to see if they should have been enrolled or if already enrolled then enrolled from an earlier date.
Where they should have been enrolled or enrolled earlier contributions will be due from this date onwards.