Pension schemes

For automatic enrolment, you need to have a qualifying pension scheme. To help you manage your schemes, you can quickly and easily set them up in Sage One Payroll. You can set up a default scheme to enrol your employees into and create multiple plans. For example, you might have a standard plan you want to enrol the majority of your employees into and a separate plan for your managers.

You can set up pension schemes in Sage One for the following providers:

  • NEST
  • NOW: Pensions
  • The People’s Pension

In future, we’ll update Sage One with more pension providers. Once new providers are added, we’ll also provide the details here.

If you don’t use one of these pension providers, you can set up your own pension scheme. We can’t recommend a pension scheme or advise if it meets the qualifying criteria. If you need more information, The Pensions Regulator has lots of useful information to help you find a provider and choose a pension scheme.

Once you’ve decided on a pension scheme provider and worked with them to get your scheme up and running, you need to enter the scheme details into Sage One.

To set up a NEST pension scheme

To set up your NEST pension scheme in Sage One, you need the details provided by NEST. To find this information you should log in to your online account at www.nestpensions.org.uk

NEST should also provide you with a letter that gives detailed information about your pension scheme. You can view an example letter here.

  • 1. Pensions > Review pension arrangements section > Add a new pension > NEST Corporation.

You can also use this option to check the details of an existing pension scheme.

  • 2. Employer reference > enter the employer reference you received when you signed up to the NEST pension scheme.

Your reference is nine numbers prefixed by EMP, for example, EMP123456789. The ID is case sensitive.

  • 3. Add Group > complete the following information:
Name Enter the group name you set up with NEST.

Groups are collections of workers who share the same contribution levels, earnings basis, pay frequency and payment due dates.
Contribution Rates Choose whether the rates are a percentage of the employees’ pay or a fixed amount.
Employer Contribution Enter the percent or fixed amount the employer pays into the pension scheme.
Employee Contribution Enter the percent or fixed amount the employee pays into the pension scheme.

Note: NEST use the relief at source arrangement with HMRC. This means they collect the tax relief from HMRC on behalf of the employee.
For example, on a full 1% contribution the employee pays in 0.8% and 0.2% is claimed by NEST from HMRC. You must enter 1% in Sage One to calculate correctly.
Earnings Basis This option is only available if you chose to contribute a percentage. Choose one of the following options:

  • % Apply To Pensionable Pay – If you select this option, all payments that you’ve selected the Pension Earnings check box for are included in the pension calculation for that pay period.
  • % Apply To Qualifying Earnings – If you select this option, all payments that you’ve selected the Qualifying Earnings check box for are included in the pension calculation for that pay period.
  • Custom Earnings Basis – To specify your own thresholds for pension contributions, choose this option. You can then specify an annual lower and upper earnings threshold. When you process your pay run, Sage One Payroll automatically adjusts the thresholds based on the pay frequency and only deducts pension on earnings between the two bands.
Lower earnings threshold (annual) This option only appears if you chose Custom Earnings Basis. Enter the annual lower earnings limit.
Upper earnings threshold (annual) This option only appears if you chose Custom Earnings Basis. Enter the annual upper earnings limit.
Deduct before tax Employees get tax relief on their pension contributions. NEST pensions use a relief at source pay arrangement, therefore contributions always deduct after tax. You should leave this check box clear.

Note: If an employee has no national insurance (NI) number you must deduct pension contributions before tax.
Payment due date Enter the date you’re due to make your pension payments to NEST. This date is agreed with NEST and is no later that the 22nd of the following month, after pension deductions are taken from your employees.
Default Plan If you want to automatically enrol all employees into this pension scheme, select this check box. You can change this for individual employees when you process their pay run.
  • 4. Add > if you want to add an additional group, repeat step 3.
  • 5. Add Payment Source > enter a name for your payment source. This should match the name of your payment source with NEST.

The payment source is the way in which you pay your contributions to NEST. Workers assigned to a payment source share the same payment method for their contributions and the person who authorises the payments and company bank details for payments, refunds and fees.

  • 6. If this is the default payment source > select the Default check box > Save.
  • 7. To add additional payment sources, repeat steps 5 and 6.
  • 8. To read our terms, click the our terms link > select the Terms check box > Save.

To set up a NOW: Pensions scheme

To set up your NOW: Pensions scheme in Sage One, you need the details provided by NOW: Pensions. To find this information you should log in to your online account at https://www.nowpensions.com/login/ Or, you can contact NOW: Pensions at clientsupport@nowpensions.com or call them on 0330 100 33 99.

  • 1. Pensions > Review pension arrangements section > Add a new pension > NOW: Pensions.

You can also use this option to check the details of an existing pension scheme.

  • 2. Enter your employer reference > Add Plan.

The employer reference is the Employer Code for NOW: Pensions and is used to identify individual employers. It normally contains numbers, letters and symbols.

  • 3. Complete the following information:
Name Enter a name for this plan.
Pay Code This is a four digit code provided by NOW: Pensions that you can use to identify one payroll from another.
Plan Type Choose the type of plan you have with NOW: Pensions.
Contribution Rates This is set to Default. This default is set by NOW: Pensions and you can’t change this.
Employer Contribution The percent or fixed amount the employer pays into the pension scheme. This defaults to a set value based on the plan type. Depending on your plan type, this is set by NOW: Pensions, and you can’t change it. If your plan type is either Saving Plus or Matched Saving, you can change the employer contribution.
Employee Contribution The percent or fixed amount the employee pays into the pension scheme. This defaults to a set value based on the plan type. Depending on your plan type, this is set by NOW: Pensions, and you can’t change it. If your plan type is either Saving Plus or Matched Saving, you can change the employee contribution.
Earnings Basis
  • If your plan is Auto Enrolment Standard, this defaults to Apply to Qualifying Earnings. This is set by NOW: Pensions and you can’t change it. All payments that you’ve selected the Qualifying Earnings check box for are included in the pension calculation for that pay period.
  • For all other plans, this defaults to Apply to Basic Earnings. All payments that you’ve selected the Pension Earnings check box for are included in the pension calculation for that pay period.
Deduct before tax Employees get tax relief on their pension contributions. NOW: Pensions use a net pay arrangement, therefore contributions are always deducted before tax. You should select this check box.
Payment due date Enter the date you’re due to make your pension payments to NOW: Pensions. This date is agreed with NOW: Pensions and is no later than the 22nd of the following month, after pension deductions are taken from your employees.
Default Plan If you want to automatically enrol all employees into this pension scheme, select this check box. You can change this for individual employees when you process their pay run.
  • 4. Add > if you want to add an additional plan, repeat step 2.
  • 5. To read our terms, click the our terms link > select the Terms check box > Save.

To set up The Peoples Pension scheme

To set up your People’s Pension scheme in Sage One, you need the details provided by The People’s Pensions.

To find this information you should log in to your online account at https://onlineservices.bandce.co.uk/ Or, you can email The People’s Pensions at support@bandce.co.uk

  • 1. Pensions > Review pension arrangements section > Add a new pension > The People’s Pension.

You can also use this option to check the details of an existing pension scheme.

  • 2. Enter your unique ID > Add Plan > complete the following information:
Name Enter the group name you set up with The People’s Pension.
Contribution Rates Choose whether the rates are a percentage of the employees’ pay or a fixed amount.
Employer Contribution Enter the percent or fixed amount the employer pays into the pension scheme.
Employee Contribution Enter the percent or fixed amount the employee pays into the pension scheme.
Earnings Basis If you chose to contribute a percentage, choose one of the following options:

  • % Apply To Pensionable Pay – If you select this option, all payments that you’ve selected the Pension Earnings check box for are included in the pension calculation for that pay period.
  • % Apply To Qualifying Earnings – If you select this option, all payments that you’ve selected the Qualifying Earnings check box for are included in the pension calculation for that pay period.
  • Custom Earnings Basis – To specify your own thresholds for pension contributions, choose this option. You can then specify an annual lower and upper earnings threshold. When you process your pay run, Sage One Payroll automatically adjusts the thresholds based on the pay frequency and only deducts pension on earnings between the two bands.
Lower earnings threshold (annual) This option only appears if you chose Custom Earnings Basis. Enter the annual lower earnings limit.
Upper earnings threshold (annual) This option only appears if you chose Custom Earnings Basis. Enter the annual upper earnings limit.
Deduct before tax Employees get tax relief on their pension contributions. The People’s Pension has two arrangements:

  • Net pay – The contributions are deducted from the employee’s gross pay, before tax is calculated. Taxable gross pay is reduced by the amount of the pension contribution, therefore the employee does not pay tax on their pension contribution.

    Note:In Sage One this is referred to as deduct before tax. In The People’s Pension portal this is referred to as GROSS. If your scheme deducts before tax, select this check box.
  • Relief at source – The contributions are deducted after tax is calculated, and the pension provider claims back the Basic Rate tax paid on this contribution, direct from HMRC.

    Note:In Sage One this is referred to as deduct after tax. In The People’s Pension portal, this is referred to as NET. If your pension is deducted after tax, leave the check box clear.
Payment due date Enter the date you’re due to make your pension payments to The People’s Pension. This date is agreed with The People’s Pension and is no later than the 22nd of the following month, after pension deductions are taken from your employees.
Default Plan If you want to automatically enrol all employees into this pension scheme, select this check box. You can change this for individual employees when you process their pay run.
  • 3. Add > if you want to add an additional plan, repeat step 2.
  • 4. To read our terms, click the our terms link > select the Terms check box > Save.

To add your own pension scheme

  • 1. Pensions > Review pension arrangements section > Add a new pension > Add your own pension. You can also use this option to check the details of an existing pension scheme.
  • 2. Name > enter a name for the pension scheme, for example, the name of the pension provider.
  • 3. Employer reference > if you have an employer reference for the pension scheme, enter it here.
  • 4. Enter the address of your pension provider. This is used later, when you print your automatic enrolment notification letters.
  • 5. Add Plan > complete the following information:
Name Enter a name for this plan.
Contribution Rates Choose whether the rates are a percentage of the employees’ pay or a fixed amount.
Employer Contribution Enter the percent or fixed amount the employer pays into the pension scheme.
Employee Contribution Enter the percent or fixed amount the employee pays into the pension scheme.
Earnings Basis If you chose to contribute a percentage, choose one of the following options:

  • % Apply To Pensionable Pay – If you select this option, all payments that you’ve selected the Pension Earnings check box for are included in the pension calculation for that pay period.
  • % Apply To Qualifying Earnings – If you select this option, all payments that you’ve selected the Qualifying Earnings check box for are included in the pension calculation for that pay period.
  • Custom Earnings Basis – To specify your own thresholds for pension contributions, choose this option. You can then specify an annual lower and upper earnings threshold. When you process your pay run, Sage One Payroll automatically adjusts the thresholds based on the pay frequency and only deducts pension on earnings between the two bands.
Lower earnings threshold (annual) This option only appears if you chose Custom Earnings Basis. Enter the annual lower earnings limit.
Upper earnings threshold (annual) This option only appears if you chose Custom Earnings Basis. Enter the annual upper earnings limit.
Deduct before tax Employees get tax relief on their pension contributions and can be one of two arrangements:

  • Net pay – The contributions are deducted from the employee’s gross pay, before tax is calculated. Taxable gross pay is reduced by the amount of the pension contribution, therefore the employee does not pay tax on their pension contribution.

    Note: In Sage One this is referred to as deduct before tax. If your scheme deducts before tax, select this check box.
  • Relief at source – The contributions are deducted after tax is calculated, and the pension provider claims back the Basic Rate tax paid on this contribution, direct from HMRC.

    Note: In Sage One this is referred to as deduct after tax. If your pension is deducted after tax, leave the check box clear.
Payment due date Enter the date you’re due to make your pension payments to your pension provider.
Default Plan If you want to automatically enrol all employees into this pension scheme, select this check box. You can change this for individual employees when you process their pay run.
  • 6. Add > if you want to add an additional plan, repeat step 5.
  • 7. To read our terms, click the our terms link > select the Terms check box > Save.

To edit a pension scheme

  • 1. Pensions > Edit Pension.

If you don’t have the Edit Pension option, it may be because you’ve not completed all the automatic enrolment preparation steps. To view and edit a pension scheme you’ve already set up:

Click Add a new pension > Existing Pensions > click your existing pension > click View / Edit next to the relevant option > amend the details as required > Save.

  • 2. To edit any details > click View / Edit next to the relevant option.
  • 3. Amend the details as required > Save.

For more information about the pension settings, refer to one of the previous sections depending on which pension provider you’ve chosen.

  • 4. To delete a plan or group, click the delete button next to the relevant option.

You can’t delete a plan or group if any employees have enrolled or joined that plan or group.

  • 5. Click Save.

If you want to start processing pension deductions for your employees straight away, you don’t have to wait until your staging date, you can assign employees to the pension scheme now.

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