How To Fix 5G110 - Employee holds a contracted out pension scheme

SAP Error Message - Details

• Message type: E = Error

• Message class: 5G - HR: Messages for Britain

• Message number: 110

• Message text: Employee holds a contracted out pension scheme

What causes this issue?

You have entered a not contracted out NI category. However, the person
concerned holds a contracted out pension scheme.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

As this person is eligible for a contracted out NI category, you should
change the NI category you have entered.

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message 5G110 - Employee holds a contracted out pension scheme ?

  The SAP error message 5G110, which states "Employee holds a contracted out pension scheme," typically occurs in the context of payroll processing in the UK, particularly when dealing with pension schemes. This error indicates that the employee in question is enrolled in a contracted-out pension scheme, which affects how their National Insurance contributions are calculated.
  Cause:
  
  Contracted-Out Pension Scheme: The employee is part of a pension scheme that has been contracted out of the State Second Pension (S2P). This means that the employee and employer pay reduced National Insurance contributions.
  Incorrect Configuration: The employee's records may not be set up correctly in the SAP system, leading to discrepancies in how their pension contributions are processed.
  Missing or Incorrect Data: There may be missing or incorrect data related to the employee's pension scheme, such as the scheme type or the employee's eligibility.
  
  Solution:
  
  Check Employee Records: Verify the employee's pension scheme details in the SAP system. Ensure that the employee is correctly marked as being in a contracted-out scheme.
  Review National Insurance Settings: Ensure that the National Insurance settings for the employee are configured correctly to reflect their contracted-out status.
  Update Pension Scheme Information: If the employee's pension scheme has changed or if there are updates required, make the necessary changes in the employee's master data.
  Consult Payroll Configuration: If the issue persists, consult with your payroll configuration team to ensure that the system is set up correctly to handle contracted-out pension schemes.
  Run Payroll Simulation: After making changes, run a payroll simulation to check if the error is resolved.
  
  Related Information:
  
  Contracted-Out Schemes: These are pension schemes that allow employers to provide their employees with a pension that is contracted out of the State Second Pension. Employees in these schemes pay lower National Insurance contributions.
  National Insurance Contributions: Understanding how contracted-out status affects National Insurance contributions is crucial for accurate payroll processing.
  SAP Documentation: Refer to SAP's official documentation or support resources for specific guidance on handling pension schemes and related error messages.
  
  If the problem continues after following these steps, it may be necessary to escalate the issue to your SAP support team or consult with a payroll specialist who is familiar with UK pension regulations and SAP payroll processing.