Pension Increases
Overview
A scheme level workflow is available for the pension increase process which requires the administrator to review and increase the pensions for those members in receipt of their benefits in line with the Schemes Trust Deed and Rules.
Pension increases are normally applied annually on a specific date or on the anniversary of the members retirement date, this usually means reviewing and applying increases each month.
Service Level Agreements may apply but, in any event, will mean ensuring that the increased rate of pension is paid in the first available payroll run after the increase due date once the increase rate is known.
The process of applying the pension increase, both calculation and template document, is automated through Mantle payroll run functionality.
Members should be provided with a letter confirming their increased rate of pension in advance of the payment date.
Process
As the payroll is being run and reconciled on Mantle each month the membership data should already been fully up to date.
Ensure that any two step approvals / outstanding workflows which may impact payroll are completed.
Check for any movements in the previous year (new pensioners / dependants and deaths), please see either Stewardship Reporting or Membership Reconciliation guidance within the Administration Reporting Solutions Articles. If applicable, check for any members that have attained GMP (Guaranteed Minimum Pension) Age during the year.
Movements are needed to check for proportionate increases where the Scheme Rules require this for the first year’s pension increase.
For any member attaining GMP Age, Mantle will automatically re-tranche the pension payment data to reflect the GMP coming into payment however like proportionate increases it is prudent to carry out a spot check on these members.
The pension increases are calculated and applied in the relevant payroll period and can be viewed by processing the payroll run – please see Payroll Run – Administrator Process Solutions Articles for guidance.
The main report to review the pension increases applied is the ADMIN gross payment reconciliation which provides a breakdown per member and each tranche.
From this report the percentage increase applied to each tranche of benefits can be reviewed very quickly to identify any discrepancies or any members which require further checks. The proportionate increase and new GMP elements should also be identifiable through this report.
Once verified the normal payroll process should be followed to instruct payment.
Member Communication
The letters for the members can then be completed on Mantle and the draft documents will be created for approval. A random spot check should take place on the statements to ensure the template, merge and format is correct.
On the payroll run, scroll to Payroll Letters and Click Create Payroll Letters
From here ensure the appropriate template is selected and adjust the date as required. You can exclude members if required but Mantle will generate a letter for every in-scope member with a valid address.
Once the run has completed you will be able to view this. Any failed records should be reviewed and re-run until the draft letters are completed for peer review.
Another administrator will then confirm the increases applied and approve the draft letters – reflecting the two-step approval peer review process.
Approved letters will be saved on each individual member record and will be date and time stamped. These will then be issued accordingly.
Any correspondence should be issued before the workflow checklist is completed in full. This will automatically register the completion of the SLA (Service Level Agreement) electronically.
Notes
Any external payroll run can follow a broadly similar process although the administration team is likely required to download another report to share the output with the payroll team.