Computer says no: why do I get so many pension errors?

1st Nov 2021
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Your payroll software produces pension files. But errors on the uploads are all too common. Why? Because payroll and pension systems often have different ideas of what is “right”. 

The simple principle of moving data between two systems relies on the data not only being “clean” but also on each of the systems understanding it in the same way. And that is not always the case. 

Pay period dates

Perhaps the most stark example is pay period dates. Payroll software tends to define a pay period as the month or week a person worked. Pension rules introduced in 2012 specify that for pensions something called a Pay Reference Period (PRP) must be used, and this is defined based on the month or week in which a person is paid. In some cases, this will mean that the pay period defined by payroll and the PRP as legally defined for pension purposes are two different sets of dates. Confused yet? 

Worked example:

  • Infinity Engineering Ltd pay their staff calendar monthly in arrears.
  • For the hours they worked in September, they get paid on 5th October.
  • The pension PRP is 1st - 31st October - because this is the calendar month in which they are paid.

In many cases, even if the pay period and the PRP are the same, there will be some minor disagreement between the payroll system and the pension system. For example, some payroll software products only produce pension data in reference to tax periods. That is fine in theory, except that several pension providers only accept data in reference to calendar months - meaning that in some cases the combination of your payroll software and your client’s choice of pension provider forces you to manually “tweak” the dates in every single file you upload. And opening CSV files in Excel tends to change the date formats - which in itself causes upload errors. 

Neither payroll software nor the pension providers are at fault

It’s not just pay period dates and PRPs.  Every payroll professional will be familiar with regular pension errors on seemingly trivial things like: 

  • Address formats
  • Title formats
  • Upper / lower casing 
  • Trailing spaces

The reason these occur so frequently is that every pension provider has their own widely varying data rules. Payroll software can do a lot of validation and ensure data is produced to a sensible standard, but can it realistically support multiple different ways of formatting an address? 

The great frustration is that neither payroll software nor the pension providers are at fault. In most cases, both systems are handling data sensibly and correctly. And yet there is a clear and obvious problem, and as ever it is the already under pressure payroll professionals who bear the brunt. 

Do I just have to live with it? 

It’s a persistent and frustrating problem that many payroll professionals have simply had to work around for as long as pension providers have accepted electronic data submissions. Fortunately some technology solutions can help. 

When software developers build payroll-to-pension integrations they should take the validation into account, and potentially even reformat the data to suit the pension provider’s needs. Not all payroll software providers do this well or even at all, and that can result in the integrations falling down on the same errors over and over again. 

PensionSync replicates as much of the pension providers’ own validations as possible within its own system, and auto-corrects many of the most common errors, including pay period dates and basic formatting of things like titles and addresses. The system has auto-corrected more than 100,000 sets of mismatched pay period dates (the ones in the "minor disagreement" category) alone - that’s over 100,000 pieces of payroll rework avoided on a single type of error, where in fact the data is likely to be correct in both systems. Think about that and you see the scale of the problem and the value of the solution. 

See how PensionSync handles pay period date errors:

PensionSync works alongside your payroll software to simplify your pension process. Register for a free trial here:

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