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Focus on Sage: using payroll to run pensions

26th Jan 2022
Brought to you by
PensionSync logo
PensionSync is the UK’s only one-stop shop for payroll-to-pension administration, working alongside...
Share this content

Processing pensions doesn’t have to be a drain on your time: with the right technology, Sage users can make pensions quick and easy to manage. 

Many people who run payroll find that one of the most time consuming and complicated parts of the process isn’t the payroll at all - it is the auto enrolment pension that runs alongside it. Thankfully technology can help to make the pension process easier for Sage users. 

Sage 50 

Sage 50 is a traditional desktop payroll solution with an add-on pensions module, which includes Sage’s Pension Data Exchange. This integrates directly with Nest, The People’s Pension, Smart Pension and Standard Life. 

There is a series of video tutorials on YouTube which shows you how to set up and use Pension Data Exchange. Here are the ones relating to the most commonly used pension provider, Nest: 

Troubleshooting

Payroll integrations are great because they save time and remove laborious manual processes. However, there are some things to think about when you are setting them up in Sage 50. 

Nest have highlighted a couple of considerations on their own website (see image):

Getting Nest to work with Sage
Nest website

In summary:

  • Sage only produces pension data in reference to tax periods. This will cause errors if the Nest scheme is not set up to be based on tax periods AND even if the Nest scheme is set up on tax periods you may need to spend time setting up a new Nest group (and transferring members from the old group) at the start of each new tax year. 
  • Sage DOES NOT approve the payment of the contributions. You need to do this manually AFTER the contribution data has been processed. 

Getting around these issues can be annoying.

The tax period issue can create a catch-22 error scenario where the payroll dates and the pension dates simply don't match, and therefore EVERY pension submission fails. To make it work, you have to reconfigure your pension scheme setup, which is time-consuming and complex. 

The payment approval issue creates repetitive manual work each pay period to approve the pension contributions. This means that even if your data submissions do work, there is still a manual task required. 

Can I use PensionSync instead?

Yes, you can.

Although Sage 50 doesn’t have a PensionSync integration, PensionSync can accept CSV files in various formats that Sage users have access to, including Nest and The People’s Pension’s standard files. 

If you want a truly standardised process, PAPDIS reports can  be used to process Nest, The People’s Pension, Smart Pension, NOW:Pensions, Aviva and Legal & General schemes. 

You can save your files to a secure location and simply drag and drop them into PensionSync, in bulk, and PensionSync will do the rest for you. 

Does PensionSync solve the tax period and payment approval problems? 

Yes, it solves both of those problems. 

PensionSync’s Automatic Pay Period Date Matching feature identifies and resolves pay period date errors in transit. For example, if you upload your tax monthly Sage file but the Nest scheme is set up as calendar monthly, PensionSync simply converts the dates for you. The file can then be processed by Nest - no error message, no manual rework and no fuss.  

PensionSync’s Automatic Direct Debit Approval feature checks with Nest on a daily basis to see whether there are any payments outstanding. Nest tells PensionSync the payment due dates, so the system can time the approval so that the money hits Nest’s accounts a few days before the deadline each pay period - no manual approval required, no late payment notices and no reminders needed. 

What about other Sage payroll products?

Sage, of course, has a wide range of products. If you’re not using Sage 50, there may be some slight differences to the above. 

For example, Sage Business Cloud payroll:

  • Only has integrations to Nest and Smart Pension
  • Still has the same issues around tax periods 
  • Still has the same issue around payment approval 
  • Can still export standard PAPDIS and other CSV formats compatible with PensionSync

PensionSync can be used alongside any Sage payroll product to simplify and standardise your pension process for a wide range of pension providers, including Nest, The People’s Pension, Smart Pension, Aviva, NOW:Pensions and Legal & General.

Get in touch

If you would like to find out more about PensionSync please get in touch with our team of payroll-to-pension experts

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