Mid Month changes and splitting service

  • Answer:

    A member’s contribution tier should be calculated based on all the earnings relating to the contract of employment for the pay month the contributions are being deducted. For April, service is required to be split at this date, however, their earnings for the full month are still relevant to April and so all earnings in April for this contract of employment should be annualised to determine the tier.

    So the actual pensionable pay related to the period the service line has been provided for should be apportioned appropriately.

    For example, if a full-time member earnt £3,000 for April, the actual pensionable pay would be split as follows:

    01/04/2020 to 05/04/2020 – Actual pensionable pay is £500

    05/04/2020 to 30/04/2020 – Actual pensionable pay is £2,500

    Please remember that for part-time irregular members their actual pensionable pay for each of the periods within April may not apportion this way and so the actual earnings for each of the periods needs to be provided.

  • Answer:

    If there was a mid-month change to a member’s annual salary, then the pensionable pay in the pay period must reflect the actual earnings between those dates.

    For example, if they earned £2,000 between 1st-15th of the month this would be on line one as pensionable pay, and line two would have £3,000 between 16th – 31st of the month.

  • Answer:

    If a member changed from full-time to part-time or vice versa mid-month, this wasn’t classed as a contact change, and they had the same role identifier, we’d require two lines of service, but contributions could be put on one line. We’d need the pensionable pay in the pay period accurately recorded for each line.

    If this change constituted a contractual change, a new role identifier would need to be provided and, in this instance, we’d require two full lines of data including contributions.

  • Answer:

    The member’s contribution tier is calculated based on the annualised earnings deducted in the pay month the tier is being calculated for.

    Where a member has started half-way through a month, it’s likely that their earnings will be lower compared to if they had worked a full month, so their contribution tier will also most likely be lowered.

    For example, if a full-time member had an annual full-time salary of £48,000, their usual monthly earnings would be £4,000. This annualised would be tier 4, 10.2%.

    If the member started halfway through a month their earnings would be halved which would be £2,000.

    If the reduced earnings of £2,000 were annualised their salary would be is £24,000 so the tier would be 1, 7.4%.

  • Answer:

    Yes, there's a potential for a member’s contribution tier to change each month. For example, where a member starts or leaves mid-month, or a part-time member whose earnings vary each month.

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