9th September 2020

Teachers’ Pensions move in the right direction

The new Monthly Contributions Reconciliation process will make life easier for the payroll profession and the schools they support. But more could be done says Hannah Dollimore, Bureau Manager at Civica.

Payroll's no longer just about paying employees. Each year, as legislation changes, we're becoming increasingly involved in other areas of employees’ pay. Part of this is pensions.

When the UK government rolled out auto-enrolment back in 2012, many payroll teams took this on as a payroll deduction and task managed outside of the standard pension schemes and team work. As a result we’re now often responsible for pensions, as well as statutory and occupational payments and deductions.

As part of our managed payroll service, my team manages both local government pension schemes (LGPS) and returns, as well as the Teachers’ Pension scheme and returns for educational payrolls. Teachers’ Pension schemes have been subject to several changes in legislation over recent years. These have resulted in a more standardised process for collecting monthly data and provided a single portal and format for schools and multi-academy trusts (MATs) to complete their returns – changes which were most welcome.

However, effort has been duplicated, which places an unnecessary admin burden on schools. It’s currently necessary to complete a Monthly Data Contributions return (MDC), a Monthly Contributions Breakdown form (MCB) and an Enrolment Template each month, for every school. These then lead to an End of Year Certificate return (EOYC) annually. With some of our MATs having tens of schools, the process is time-consuming to say the least.

We’re pleased to see that Teachers’ Pensions has listened to feedback from schools and has invested in a Monthly Contributions Reconciliation (MCR). This will consolidate all the above into a single monthly return, providing a simpler and more automated way for schools to submit their contributions. It will also remove the need for an annual return. This change will increase accuracy through improved validation, but also represents a significant timesaver for payroll and pension teams in creating and submitting the returns monthly. We’ve met the technical needs of this new return and our bureau and software customers will be able to use it and onboard to MCR ahead of the deadline of October 2021.

The MCR is a positive step forward for schools, MATs, Teachers’ Pensions themselves and payroll software suppliers, like Civica, who help to generate the return. While it’s clear that major improvements have been made, further automation would bring even more benefits. An online filing system, like RTI, would remove the need to manually upload a file via a portal each month. While Teachers’ Pensions have confirmed they do not currently have any plans to develop such a system, we’re ready and willing to support it via our payroll software when it comes.  

Find out more at Teachers' Pensions.