Pay period dates are a common source of errors in payroll-to-pension administration. PensionSync deals with most pay period date errors for you by simply checking what the pension provider is expecting and amending the dates in your payroll data if they are only slightly different.
However there are some scenarios that will result in errors:
The pay period dates are a whole pay period out
Sometimes we see pension data submissions where the pay period dates supplied by payroll are a whole pay period different to what the pension provider is expecting. Commonly this relates to how The Pension Regulator defines the relevant period for pension contributions.
- A payroll user processes a pay run for the calendar month of April
- The employees are paid in arrears, on 5th May.
- The Pension Regulator defines the relevant "Pay Reference Period" (PRP) for pension contributions using the regular interval between payments and the date the contribution is deducted from pay (the pay day) - in this case the regular interval is calendar monthly, and the pay day is 5th May.
- So the PRP in this example is the calendar month of May because that is the calendar month in which the pay day falls.
For pension processing, the key detail is the period where the pay is paid, not where the hours were worked.
This often causes confusion. Some employers may have been paying contributions to the wrong PRP historically and it's only when they switch to an automated pension process that they realise the problem - because they get an error saying the pension provider is expecting a different pay period.
The simplest way to ensure contributions are able to be paid correctly going forward is to move the PRP the pension provider is expecting on by 1 period, so that it matches the correct dates payroll is producing. Note, there is no need to do this for NEST who will just proceed with a nil/blank schedule, and everything aligned going forward.
In the above example, if the pension provider submits April as a nil return they will then correctly expect the next PRP submitted to be May and the user will be able to Resubmit to Employment Hero PensionSync to complete the pension data submission for the pay run.
As long as all historic contributions have been paid the pension provider and The Pension Regulator are unlikely to ask an employer to go back and correct any past details.
Note - if the pay day in the above example was any date in April, the PRP and the pay run dates would both have been the calendar month of April so much less likely to cause confusion. It is generally only arrears payrolls (where the pay day is after the end of the pay run) that experience this issue.
For full regulatory details around pay reference periods and workforce assessment see: