1.    Simple Pension Scenario

Your organisation offers a single personal pension plan in GB FlexBens with only the option to flex the employer pension contribution. A male employee opts for a pension option where he reduces the employer pension contribution by 3.75%.

After the employee has enroled this plan, his infotype Pension GB (0071) record is updated with the data contained in the column Flex Option . The surplus generated (GBP 375.00) is available for spending on other Flexible Benefits on offer, or could be paid as cash into the employee’s gross salary, depending on the rules of your Flexible Benefits scheme.

2.    Matching Contributions Pension Scenario

Your organisation offers a single personal pension plan in GB FlexBens with the option to flex both employer and employee pension contributions, according to a matching rule. A female employee opts for a pension option where she reduces both employer and employee pension contributions by 3.00%.

After the employee has enroled this plan, her infotype Pension GB (0071) record is updated with the data contained in the column Flex Option . The surplus generated (GBP 300.00) is available for spending on other Flexible Benefits on offer, or can be paid as cash into the employee’s gross salary, again depending on the rules of your Flexible Benefits scheme.

3.    Salary Sacrifice Pension Scenario

Your organisation offers a salary sacrifice pension plan within GB FlexBens, and applies the National Insurance Cost Neutrality principle.

A male employee “sacrifices” the employee pension contribution from his salary and adds it instead into the existing employer pension contribution. Such a salary sacrifice produces Employer National Insurance Contributions (NICs) savings on the sacrificed employee contribution.

After the employee has enroled this plan, his infotype Pension GB (0071) record is updated with the data contained in the column Flex Option . The surplus generated (GBP 500.00) is available for spending on other Flexible Benefits on offer, or can be paid as cash into the employee’s gross salary.

In addition, the Employer NICs saving resulting from this salary sacrifice is GBP 90.00 which is added back as further employer pension contributions. This process is referred to as pension payback, which you must customise in the Benefits Administration Implementation Guide (IMG), under: Plans → Pension Plans .

There are a number of other possibilities for this pension payback amount, besides adding it back as an additional employer pension contribution . It could also be:

Retained by your organisation

Paid back to the employee as a salary enhancement

Used by the employee to fund other flexible benefits selections

Wage type customising is required if you wish to administer any of the above three pension payback administration options, rather than return any pension payback amounts in the form of increased employer pension contributions.

You carry out this customising in the GB Payroll IMG, under: Payroll Accounting → Benefits .

In GB FlexBens, salary sacrifice applies only to the Personal Pension Plan

See also:

Payroll Scenario for GB FlexBens Holiday Plan