Pension contributions

[zipmeister]

Hi I was recently made F/T and have noticed that my pension contribution pay is £326.74 but my basic pay is £404.81 any idea why the figures are not the same?

[heapsy]

There seems to be a slight difference from mine which are £405.81 and £351.74 respectively.That is based on 39 hours or full time. My allowances are £14.45 and £9.13. Not sure which of these is pensionable Did you start after 31st March 1987? That would put you in section C of the pension.The difference is due to the fact you are in section c of the pension there is the LEL or Lower Earnings Limit applied. £3328 a year of your pay is NONE pensionable, hence the difference between the figures.

[nataddick]

This is Robert T's area of expertise and I am sure he will reply. The Lower Earnings Deduction is £3,328 or £64 per week which would account for the majority of the difference. This is the amount that is, effectively, disregarded from your pay for pensionable purposes. You do not pay pension contributions on this amount BUT the downside is that your pensionable pay is reduced by the same amount when your pension is calculated.

As heapsy says you may have some non-pensionable allowances that account for the balance of the difference. You can always call HR payroll for advice.

[RobertT]

Hi I was recently made F/T and have noticed that my pension contribution pay is £326.74 but my basic pay is £404.81 any idea why the figures are not the same?

I think to answer your question properly we really need a bit more info:

Was your increase to full time hours permanent or temporary?
What was your basic pay & pension contributory pay before you were made full time?
Which RM pension scheme are you a member of: RMPP Section A/B, RMPP Section C or the RMDCP?

Personally my numbers mirror those of heapsy apart from I also get Reserved Rights Driving allowance of £6.00 per week. My weekly pension payment(RMPP C EE) of £21.10 represents 6% of £351.74 but there is still a discrepancy of around £500 per year in relation to basic pay, pension contributory pay and the LEL. I’ve always assumed that the two Delivery Supplement payments have an element(aprox £10) which is pensionable to make up the difference, but to be honest I don’t know for sure.

The problem you seem to have is that your pension contributory pay is lower and so on the face of it the LEL reduction is effectively higher. Although that reduction only applies to Section C members of the RMPP, hence the need to know which pension you’re in.
My guess is that payroll have made a mistake and not input the correct amount to allow for your increased hours. So getting touch with them is probably your best bet.

This is Robert T's area of expertise....

I’m not sure it is, but I hope I’ve been some help.

[Tman]

Hi I was recently made F/T and have noticed that my pension contribution pay is £326.74 but my basic pay is £404.81 any idea why the figures are not the same?

Are you trying to say that your gross is £404 but your assessable pay is only £326?

[RobertT]

Hi I was recently made F/T and have noticed that my pension contribution pay is £326.74 but my basic pay is £404.81 any idea why the figures are not the same?

Are you trying to say that your gross is £404 but your assessable pay is only £326?

No he’s saying the ‘pension contributory pay’ as detailed on his wage slip is different to his basic pay. You can find both amounts above the deductions column.

Assessable pay is basically gross pay minus pension contributions and any other tax efficient payments you might make, like cycle to work or to charity.

[zipmeister]

Hi Thanks for the replies
I am in pension C
no pensionable allowances
June 2014 33.75 hrs basic pay £341 pension contrib pay £320
July 2014 FT temp basic pay £394 pension contrib pay £319
July 2015 FT perm basic pay £405 pension contrib pay £326
I have been in touch with payroll they sounded confused took my number and said they would get a supervisor to phone back, still waiting. This was after trying to get my manager to get it looked into he also said he was waiting for a call from them.

[heapsy]

The pensionable pay is lower than the actual pay. The difference, multiplied by 52 will total the LEL figure previously stated. It was a way of reducing the companies pension liability, brought in during the 1980s

[RobertT]

Being in Section C your PCP will always be less than your basic pay due to the LEL reduction, but it seems to me that in June 2014 your PCP was too much but by this July it is too low. So it could be that things are being evened out, but I would have thought payroll would know if that was the case.

Also as your hours seem to change quite a lot, that could of confused matters along the way. My advice would be to keep hounding payroll until they realise there's something wrong.

[nataddick]

I have just dug out one of my payslips from April this year as I could not work out my pensionable pay to exactly match what was on my payslip. I phoned HR and made notes from that call which I have kept.

I now recall that when I queried my pensionable pay with HR, I was told that everyone has a 'baseline' pensionable pay amount as at 1 April 2015. I was told this was based on a 2.3% increase from 1 September 2014 that being the annual RPI increase applied under the 'new' pension plan rules that were recently agreed, where RM started to increase pensionable pay by RPI in the previous September rather than actual pay increases in April.

I was given my annual baseline pensionable pay which is after deduction of the LED and then divided by 52.179 weeks. I added my pensionable shift allowance to that and deducted my POAL and it balanced exactly.

So, really without your baseline pensionable pay figure from HR you will never get the figures to balance exactly! The guy I spoke to in HR was very helpful but it took about 15 mins holding on the line before I got a full explanation.