Fusion UK Payroll: Assumed Pensionable Pay Not Considered in LGPS for Statutory Parental Bereavement Leave (Doc ID 3031834.1)

Last updated on JUNE 28, 2024

Applies to:

Symptoms

Assumed Pensionable Pay (APP) is not considered in Local Government Pension Scheme (LGPS) for Statutory Parental Bereavement Leave when employee is on reduced pay for LGPS employer Contribution.

The expectations: Employee is on reduced pay for 14 days (as only statutory payment is made to the employee for those 14 days), Assumed Pensionable Pay should be used for Pensionable earnings calculation for employer contributions and will be Prorated for 14 days. For rest 17 days employee was on full pay so the prorated Permanent Pensionable Pay should be used as pensionable earnings for those days.

The issue can be reproduced at will with the following steps:
1. Run QuickPay process for one employee.

2. Check the Payroll results.

3. Observe the unexpected calculation (example):
Pensionable elements paid to the employee = Basic Pay + London Weighting Support+ Statutory Parental Bereavement Payment + Parental Bereavement Payment Offset = 2398 + 359 + 368.06 + (- 1245.16) = 1879.9
Employee Pensionable Earning = 1879.9 | LGPS Pension Employee Contributions = 1879.9*(0.065) = 122.19
Employer Pensionable earning = 1879.9 | LGPS Pension Employer Contributions = 1879.9*(0.103) = 193.63

4. Writing down the expectation (explained):
Absence taken from 1 Aug 2024 – 14 Aug 2024, Duration = 14 Days
Employee is on reduced pay for 14 days (as only statutory payment is made to the employee for those 14 days), Assumed Pensionable Pay should be used for Pensionable earnings calculation for employer contributions and will be Prorated for 14 days.
LGPS Pension Assumed Pensionable Pay = 2757.00 | > = (2757.00/31)
LGPS Assumed Pensionable Pay Per Day = 88.94 | > = 88.94 * 14
=> LGPS Assumed Pensionable Pay (for 14 days) = 1245.096774
For rest 17 days employee was on full pay so the prorated Permanent Pensionable Pay should be used as pensionable earnings for those days.
LGPS Pension Permanent Pensionable Pay = 2757.00 | > = (2757.00/31)
LGPS Permanent Pensionable Pay Per Day = 88.94 | > = = 88.94 * 17
=> LGPS Permanent Pensionable Pay (for 17 days) = 1511.903226**

So, the Sum of both the balance (Pensionable Earnings to be used for Employer Contributions Pen EMPR) = LGPS Assumed Pensionable Reduce Pay + LGPS Permanent Pensionable Reduce Pay = 1245.096774 + 1511.903226 = 2757
LGPS Pension Employee Contribution (This will be based on the employee's actual pay) = Basic Pay + London weighting Support+ Statutory Parental Bereavement Payment + Parental Bereavement Payment Offset = 2398 + 359 + 368.06 + (- 1245.16) = 1879.9
Employee Pensionable earning = 1879.9 |> LGPS Pension Employee Contributions = 1879.9 * (0.065) = 122.19
LGPS Pension Employer Contribution (This should be based on employees Assumed pensionable pay for the duration that the employee was on reduced pay and the permanent pensionable pay for when the employee was on full pay)
Employer Pensionable earning EMPR (as calculated above) = 2757 |> LGPS Pension Employer Contributions** = 2757*(0.103) = 283.971

Changes

Cause

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