Pension Plan Scenarios

Three typical pension scenarios are outlined below, to illustrate how different types of pension scheme can be implemented within Flexible Benefits for Great Britain (GB FlexBens):

Scenario 1: Option to flex employer pension contribution only

Your organisation has implemented GB FlexBens and provides only one pension plan, with a single option for employees to amend the amount of the employer pension contribution:

After benefits enrolment, infotype GB Pension (0071) is updated as Employer 5%, Employee 5%. GBP 300 can be then spent on other benefits, or refunded to the employee in his or her salary, if the rules of the scheme permit this.

Scenario 2

Your organisation has implemented GB FlexBens and provides only one pension plan, with a single option for employees to amend the amount of the employer and employee pension contributions, according to a matching rule. That is, if your organisation pays a certain percentage contribution, then the employee must match this. The employer/employee matching values are defined in Customising.

After benefits enrolment, infotype GB Pension (0071) will be updated as Employer 5%, Employee 3%. GBP 300 can be then spent on other benefits, or refunded to the employee in his or her salary, if the rules of the scheme permit this.

Scenario 3

Your organisation has implemented GB FlexBens and provides a salary sacrifice pension plan, where employees are able to “sacrifice” their own pension contributions from salary and add them to the standard employer pension contribution. Such a salary sacrifice produces employer and employee NIC savings on this employee sacrifice amount, and the employee will also pay less tax on his or her salary. In addition, in this scenario, your organisation has implemented the principle of NI Cost Neutrality.

After benefits enrolment, infotype GB Pension (0071) will be updated as Employer 13%, Employee 0%, and the employee sacrifices GBP 500 from his or her salary.

Employer NICs savings arising from the employee sacrifice (pension payback amount) can be addedback 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 .