Pensions | Why is my Pension Direct Debit different to what I am seeing on PayFit?

This article explains the most common reasons why the amount taken by your pension provider may differ from the value you see on PayFit.

The most common cause of discrepancies occurs when employees leave the pension scheme directly through the provider, and this change is not updated on PayFit before payroll runs. In this case, PayFit will still deduct contributions from the employee via payroll, but the pension provider will not accept them as the employee is no longer part of the scheme.

How is this fixed?

If PayFit manages your pension scheme, we are notified when an employee’s contributions are not accepted because they have left the scheme. We then add a pension refund to the employee’s payslip for the following month to correct the previous month’s contributions.

Another reason for discrepancies is that some pension providers do not take contributions from members until they have passed their 1-month opt-out period. Smart Pension is an example of a provider that operates this way.

This means PayFit uploads contributions for all members, but the provider only takes contributions from employees who have been in the scheme for over a month. Contributions for employees still within the opt-out period remain in the provider’s pot. The following month, once the employee has passed the opt-out period, the provider takes both the current month’s contributions and any contributions from the previous month.

Example:

In February, when the employee is no longer in their opt-out period, Smart Pension will take the February contributions plus the £160 from January.

If a discrepancy occurs and it is not due to one of the above reasons, please contact our team for assistance.