If Smart Pension rejects the submission for “Contribution rates are below the legal minimum”, this means the pension contributions rates do not match what is expected by Smart Pension.
Pension contribution tiers available in Smart Pensions are:
Qualifying earnings: ER 3% / EE 5% = 8%
Basic Pay Only (Tier 1): ER 4% / EE 5% = 9%
(Basic) 85% of Total Pay: ER 3% / EE 5% = 8%
Total Pay: ER 3% / EE 4% = 7%
The pension will be rejected if the pension provider is expecting 9% because the chosen tier in Smart is for example Tier 1 with minimal contributions of 9%, and Paycircle is set as Qualifying Earnings with a total of 8% pension contributions which will create the 1% discrepancy which will cause the pension to fail.
The Tier chosen in Paycircle should match the Tier selected in Smart. This can be achieved by amending Paycircle to reflect the pension provider or by amending Smart setup to match Paycircle.
To amend the pension settings, follow the steps below.
1. Click Pensions.
2. Click the Smart Pensions scheme you wish to amend.
3. Click on Settings.
4. Under Groups click on Edit.
5. Select the right Group contribution Basis for the group you want to amend and click Save