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www.kentpensionfund.co.uk
Year End Process2013 / 2014
This year’s key date
• The deadline for submitting your Year End Return is 11 April 2014
• If your Return is not received by this date your employees may not receive an Annual Benefit Illustration as their records may not be accurate
• Any Annual Allowance test may also be inaccurate
The Year End Return
• Excel Workbook – E-mailed to your nominated contact
• Workbook contains the following worksheets:-– Read Me Section– Employer Details– Pen4A– Pen4B– Pen4C– Checklist and Balancing
Read Me……
• This section provides a brief explanation of the other worksheets contained within the workbook
• There are quick links to the other worksheets
Employer Details
• Select your employer name from the drop down menu
• Complete the name of the person completing the Year End Return, the employer address and the name of the payroll provider
Pen 4 A
• The main part of the return
• List all employees who have paid pension contributions during 2013/2014
• Basic scheme contributions, additional scheme contributions and Additional Voluntary Contributions (AVC’s) need to be shown in the relevant column as monetary amounts
• Remember to show any changes in contribution rate (same line)
• More than one contract – separate lines for each
Pen 4 B
• This form is used by the Treasury & Investments Team
• Provides a summary of all contributions paid for the year – employee and employer
• The format is similar to the Pen4/1 which should be completed on a monthly basis
• The total employee contributions stated on this form should equal those quoted on the Pen4A – don’t forget any additional contributions
Pen4C
• This form should be completed if you have employees who have no fixed contractual hours
• Provide details of the total number of hours worked during the year and the number of weeks the employee is paid for
• We will calculate the average number of hours worked by the employee over the year
Checklist & Balancing
• Complete the checklist – select the relevant answer from the drop down list
• Your answer will highlight any areas that require further attention
• The balancing is automatic – your input on the Pen4A must balance with the information input on the Pen4B
Other tips for completing the forms….
• Small red triangles can be found on the Pen4A, Pen4B and the Pen4C – place your cursor over these and additional notes will be displayed
• All sheets need to be completed even if it is a nil return (e.g. Pen4C)
New Starters & Leavers
• Do you have any employees who have joined or left the scheme during the year?
• Are details of these members included on the Pen4A?
• Have you completed the New Start spreadsheet or leaver forms and sent the information to pensions?
• The New Start spreadsheet and leaver forms can be found on our website:-
www.kentpensionfund.co.uk/employers
Before sending your Return to Pensions…….
• Make sure the return balances – check the Checklist & Balancing tab
• Check that the totals on the Pen4A and Pen4B match the monies paid across to the Treasury and Investments Team – any differences will be queried unless there is an explanation
• Ensure your return is sent back to the Pension Section ([email protected]) from your nominated E-mail address
What happens when your Return is received……
• We Check…..
– That all the tabs have been completed and are in the correct format
– The totals balance
– That payments have been made to the Investments Team through the year
What happens when your Return is received continued……
• We will send a confirmation e-mail once your Return has been verified by the Pension Section
• The information on the Pen4A is then downloaded onto each members’ pension record – this process is called ‘Contribution Posting’
How is the information downloaded
• Using the National Insurance Number and the Payroll Number provided on the Pen4A the system indentifies a match on the Pensions Database.
• Where a match is identified the basic contributions, additional scheme contributions and the contribution rate are ‘posted ‘ to the members’ record
Remember – it is vitally important that the National Insurance Number and the Payroll Number are
quoted accurately
What happens if a matching record cannot be found?
• A report is created showing all errors
• Reasons for an error are…..– Different National Insurance Number– Different Payroll Number– No record for the member
• Any errors will be referred back to yourselves via e-mail
• Any errors will cause a delay in the processing of your Year End Return
What happens once the year end return is processed?
• Each record is updated with a pensionable pay figure calculated from the contributions posted
• This process is referred to as Re-Org (re-organisation of Pensionable Pay)
• The Pensionable Pay figure is used to generate the Annual Benefit Illustration
How Re-Org works
• Takes into account the following information that you have told us:– Contributions paid in 2013/2014– Contribution rate or rates paid over the year– Number of hours worked and any changes during the
year
• From this information a pensionable pay figure as at 31 March 2014 is calculated
Calculating the Pensionable Pay
Total Contributions paid x 100/contribution rate
=
Pensionable Pay
£1000.00 (conts) x 100 / 6.5 = £15384.61
Pensionable pay is used in:-
• calculation of a members’ pension benefit
• on the Annual Benefit Illustration
• Why is an Annual Benefit Illustration important?
• Now that we have established why pensionable pay is so important…………..
What happens once the Pensionable Pay is calculated by the Pensions Section?
• The Pensionable Pay figure as at 31 March 2014 is compared with the figure calculated for 31 March 2013 or the start pay is later
• The comparison is based on parameters set by the Pension Section in line with guidance from the Scheme Actuary
• If the Pensionable Pay figure falls outside of these parameters an error report is generated
The Error Reports….
• These reports will be sent to you via e-mail in an excel format
• There are four error reports:-
– A – pensionable pay is less than start pay
– B – pensionable pay is less than previous year
– C – pensionable pay has increased by more than 20%
– D – no contributions have been received for the year
You may get all 4, some or none of the above
The A Report
• The pensionable pay at 31 March 2014 is less than start pay
• Only generated for those members’ who started during 2013/2014
• Possible reasons that may generate an error:-– Incorrect start pay– Incorrect start date– Incorrect starting hours– Change in hours since joining– Rounding
The B Report• The pensionable pay at 31 March 2014 is less
than the pensionable pay at 31 March 2013
• Possible reasons that may generated an error:-– Individual has left the scheme and no leaver paperwork has
been sent– Incorrect hours or a change in hours during the year– Maternity leave– Career Break – Unpaid leave– Sickness– Previous year’s pay was higher due to a merit award– Arrears of contributions paid in previous year
The C Report
• The pensionable pay at 31 March 2014 has increased by more than 20% since the previous year
• Possible reasons that may generate an error:-– Incorrect hours or a change in hours during the year– Additional payments or Merit Award– Promotion– Acting up pay– Contributions being incorrectly deducted on overtime
The D Report
• No contributions have been received for a member
• Possible reasons that may generate an error:-– Employee with no fixed hours who has not worked– Joined the scheme at the end of the financial year
and was first paid in April– Returning Officer – no election duties– Career Break– Left the scheme and no leaver package has been
sent to pensions
How to avoid queries
• Remember to tell the Pension Section of any changes to Scheme Members contracts when they happen throughout the year
• Make sure the correct contributions are being deducted
Why do we do the Year End process?
• It is a statutory requirement
• Ensures scheme members records are accurate
• Annual Benefit Illustrations
• Annual Allowance testing
• Actuarial reasons – data is required for various calculations such as FRS17 / IAS19
2014!!
• Next Year – New Regulations – Same process
• We will still carryout the Year End Process however some of the information we require will be different.
• Next year you will need to provide us with the pensionable pay figure – the pension section will not be calculating it
Important Reminders
• Year End Returns started being despatched week commencing 10 February 2014
• Deadline for submitting Year End Return is 11 April 2014
• Make sure your figures balance
• Make sure any changes to scheme members’ contracts have been sent to the Pension Section
• Make sure we have been informed of all New Starters and leavers
Sending your Year End Return
• The e-mail address for sending your completed Year End Return:-
Contact Information
• Claire Silvester – 01622 694680 Scheme Events & Member Communication Consultant
• Karen Brooker – 01622 223513 Communications & Support Officer
• Treasury & Investments Team – 01622 694625
Employer Liaison Contacts
• Nicky Beeching – 01622 694734
• Julie Lock – 01622 694765
• Nick Lockyer-Fincken – 01622 223579
• Jules Brown – 01622 694712
• Joyce Chalk – 01622 696635
And Finally……
Thank you for listening and good luck with your Year End Return
Remember, if you are unsure, please give us a call
And don’t forget to come to our training next year for the 2014 process!!
