COSR Pensions

What is contracting-out?

Contracting-out is when an employee leaves the additional State Pension (currently the State Second Pension; prior to April 2002 - the State Earnings Related Pension Scheme (SERPS)) and joins a contracted-out occupational pension or personal/ stakeholder pension instead. The employee will subsequently receive a pension from the scheme they have joined rather than from the additional State Pension. To reflect this, they receive a rebate of National Insurance contributions.

Changes to Contracting out from 6th of April 2016:

On 6 April 2016 these rules change, if you are currently contracted out:

  • you will no longer be contracted out 
  • you will pay more National Insurance (which will be the standard amount of National Insurance)

 

Setting up a COSR Pension on BrightPay

 

To access this utility, click Pensions:

1) Click Add New Scheme followed by Contracted-Out Salary Related Scheme (COSR)

2) Enter the name of the policy and the reference number provided by the pension company

3)  Default Contributions - this is optional. Complete this section if you would like to apply default contributions to an employee who is added to this pension scheme. They can subsequently be changed for each employee as required

4) If applicable, set a range of earnings on which to calculate percentage-based deductions for the scheme

5) Within the Contact and Payment section, enter the contact details of the COSR pension provider

6) Select the method of payment for remitting the pension contributions to the pension provider. If the method of payment is credit transfer, enter the pension provider's bank account details accordingly. 

7) Click Save

 

Applying the Pension Scheme to an Employee:

To apply the COSR pension to an employee, click Payroll and select the employee:

 

TO ENTER A PENSION DEDUCTION BY AMOUNT:

1) Under Additions & Deductions click the Add icon

2) Under Deduction, select the COSR pension scheme

3) Select the £ sign from the drop down menu and enter the Employee Contribution

4) Select the £ sign from the drop down menu and enter any Employee Additional Voluntary Contribution, if applicable

5) Select the £ sign from the drop down menu and enter the Employer Contribution, if applicable

 

 

TO ENTER A PERCENTAGE-BASED PENSION:


1) Under Additions & Deductions click the Add icon

2) Under Deduction, select the COSR pension scheme

3) Select the % sign from the drop down menu and enter the Employee Contribution percentage amount

4) Select the % sign from the drop down menu and enter any Employee Additional Voluntary Contribution percentage amount, if applicable

5) Select the % sign from the drop down menu and enter the Employer Contribution percentage amount, if applicable

Need help? Support is available at 0845 300 4304 or support@brightpay.co.uk.

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