Teachers Pension Incorrectly Includes Overtime in the Rate Calculation
(Doc ID 1966188.1)
Last updated on JUNE 14, 2021
Applies to:
Oracle HRMS (UK) - Version 12.1.3 and laterInformation in this document applies to any platform.
Symptoms
There is an issue with the new Teachers 2015 pension scheme and the calculation for Overtime. Overtime is now pensionable – but the wrong rate is being used to calculate the pension deductions. The rate of pay should be determined by the salary (included emoluments and market supplements etc). Whereas the overtime is being added to the salary to determine the pensionable pay and hence the % to deduct.
1. (#734228) Full-time member earning £40,133 but with overtime of £1400 (contribution rate should remain at 9.6% but with it applied to total earnings)
Basic Salary Overtime TPS deduction % deduction Expected % deduction
3344.42 1400.00 536.12 11.30 9.6%
2. (#728161-2) Part-time member earning £15,404 (0.4x£38511) with overtime of £1000 - contribution rate of 7.4% expected applied to total earnings
Basic Salary Overtime TPS deduction % deduction Expected % deduction
2338.8 1055.1 201.14 8.60 7.4%
Information in Oracle Teachers Pension Scheme Technical Brief:
Contribution Rates for 2015 onwards
Employers will first need to determine the employees “annual rate of pensionable earnings” for each pay period, as illustrated in the table provided, in order to determine the contribution rate for the pay period. Note that overtime isn’t included when determining the annual rate of pensionable earnings.
STEPS
The issue can be reproduced at will with the following steps:
- Run Quick Pay for employee with Overtime
Cause
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In this Document
| Symptoms |
| Cause |
| Solution |
| References |