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OHAGBP003 - Set Up Pension Calculation Rule

OHAGBP003 - Set Up Pension Calculation Rule

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In this step you will define the calculation parameters for the pension bands. They will appear as the reference and default figures for the pension scheme subtypes of the pensions infotype (0071).

SAP recommends that tables entries are made for only one of the three types of calculation rules (flat rate, percentage, mixed) as only one table will be used for calculation. This must be the same type that is defined in the 'Set up pension scheme' calculation rules step.

Additionally, the number of band levels defined as boundaries to the calculation bands will determine how many band calculation entries are needed. For example, if only one band level is set, defining two bands, then only two calculation band entries are required.

Note that in the case of flat rate calculations, the band level bands are not used, therefore only one contribution entry is appropriate.

The pay levels divide the pensionable pay into three bands: low, middle and upper.

With 2 pay levels set as:

Band no. Band Level
0001 300
0002 600

and with a pensionable pay of 1000, the three bands would be:

Lower: 0 to 300
Middle: 300 to 600
Upper: 600 to 1000.

If pensionable pay fell below 600, there would be no upper band as the middle band would be from 300 to the pensionable pay.

If pensionable pay fell below 300, only the lower band would exist.

With mixed band settings as:

Band no. Flat EE Flat ER % EE % ER
0001 50 50 - -
0002 - - 20 20
0003 - - 10 10

and the band boundaries and pensionable pay as above, the employee's and the employer's contributions would be calculated as follows:

Lower (0-300): 50 (flat)
Middle (300-600): 60 (20% of 300)
Upper (600-1000): 40 (10% of 400)
Total: 150

It is assumed that the pension scheme is defined as having a mixed calculation rule.

  1. To create a new pension calculation rule, choose 'Maintain calculation rules and bands" and enter a rule number that has not been used before.
  2. At the top level, select 'New entries.'
  3. Enter up to two entries with sequential keys as the boundaries for the pension calculation bands. In the case of flat rates, the band level boundaries are not used but a dummy entry should nevertheless be made to provide a key table entry.
  4. Save your entries.Choose 'Assign Calcualtion Bands to Pension Scheme and create a new entry.
  5. Enter the Pension scheme identifier, the validity dates and the Pension calculation rule identification.
  6. Save your entries.
  7. Select one of the three types of calculation bands (flat, percentage or mixed) corresponding to the calculation type defined for the scheme.
  8. Enter the Pension calculation rule number.
  9. Select 'New entries' and enter up to three entries with sequential keys with the employee and employee flat or percentage contributions for each calculation band. In the case of flat rates, only one record entry is necessary.

For the mixed calculation bands, it is only sensible to enter either a flat rate or a percentage for each band. Only one will be provided as a reference value for the infotype. The infotype will only allow one value for each band.






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Length: 3670 Date: 20240603 Time: 194142     sap01-206 ( 62 ms )