Retirement Fund Member’s Structure {PAOP-10}

Retirement Fund Tax harmonisation was introduced with effect from 01-Mar-2016 and is applicable to South African clients only.

Retirement Fund Membership details for each employee (i.e. where the Fund Code has been defined as a Pension, Provident or Retirement Annuity Type Fund on {FPRG-3}) is maintained on {PAOP-4} and /or {PAOP-5} and those Retirement Fund Membership details, per employee, are displayed on this Menu Option.

The Retirement Fund Component, Fund Category, Fund Factor and Start Date of this information, for each record, must be entered on this Menu Option. This information is used by Calculation Method ‘X’ in the salary calculation, providing the relevant Earning /Deduction Codes have been defined on {FPRG-6}, linked to each Retirement Fund Code on {FPRG-12} and are linked to the applicable Appointment Types on {FPRG-7}.

Please Note: This Menu Option can also be accessed from {FPRI-15}

The following additional functionality exists for this Menu Option:

Validation of Data

On exit, an automated validation process is run and a detailed Validation Report is generated.
The following information is validated:

Retirement Fund Component field must have a value for all records. If no value exists, a validation error is reported.
If Retirement Fund Component is :

‘DC’ (Defined Contribution) then the Fund Factor field must be null else an error is reported
‘DB’ (Defined Benefit) or ‘DC & DB’ (combination of Defined Contribution & Defined Benefit) then the Fund Factor field must have a value, else an error is reported.

If a record exists on either {PAOP-4} or {PAOP-5} but no record exists for the employee on this menu option, an error is reported.
If multiple records exist for an employee with the same Fund Code and overlapping Retirement Fund Start and Retirement Fund End Dates, an error is reported.
If Date Joined {PAOP-4} or {PAOP-5} differs from Fund Join Date {PAOP-10} an error is reported

Export of Data

Data can be Exported from this Menu Option, refer to ‘Export Retirement Fund Member’s Structure’ {PAOP-11} and {FPRI-16}

Import of Data

Data can be imported into this Menu Option, refer to ‘Import Retirement Fund Member’s Structure’ {PAOP-12} and {FPRI-17}

The Export /Import functionality would typically be used when there are a large number of changes to the Fund Factor values for members, as provided by the Retirement Fund provider from time to time. This functionality eases the burden of manually capturing information.

Fields in this option:

Block 1: Retirement Fund members

In this block, the Retirement Fund Component, Fund Category, Fund Factor and Start Date of this information is linked to existing Retirement Fund membership details.

Should the Retirement Fund Component and /or Fund Category and /or Fund Factor change from time to time for a Person /Fund Code, multiple records can be defined per Person /Fund Code either by manually capturing the information or by using the Export Functionality {PAOP-11} or {FPRI-16} and Import Functionality {PAOP-12} or {FPRI-17} providing:

A record exists for the Person /Fund Code on either {PAOP-4} or {PAOP-5} AND
The dates specified for each record for ‘Retirement Fund Start Date’ and ‘Retirement Fund End Date’ do not overlap and fall within the dates specified for the Person /Fund Code on {PAOP-4} or {PAOP-5}.

Field	Type & Length	Description
Person	N9	When a personnel number is linked to a Retirement Fund on {PAOP-4} or {PAOP-5} (i.e. where the Fund Type has been defined as Pension, Provident or Retirement Annuity on {FPRG-3}), the Personnel Number, Surname and First Names are displayed here. When a new record is created, the details of the Person Number, Fund Code will be validated to {PAOP-4} or {PAOP-5} where a valid record must exist. If a valid record does not exist, an error message will be displayed.
Fund Code	A4	The Retirement Fund Code linked to the personnel number on {PAOP-4} or {PAOP-5} is displayed, in addition to the Fund Description. When a new record is created, allowed Fund Codes may be viewed via the <LIST FIELD VALUES> command. Only Fund Codes that have been defined as a Pension, Provident or Retirement Annuity on {FPRG-3} will display. The details of the Person, Fund Code will be validated to {PAOP-4} or {PAOP-5} where a valid record must exist. If a valid record does not exist, an error message will be displayed
Fund Join Date	(DD-MM-YYYY)	The Retirement Fund Start Date /Join Date as defined on {PAOP-4} or {PAOP-5} is displayed.
Fund Resignation Date	(DD-MM-YYYY)	The Retirement Fund Resignation Date /End Date as defined on {PAOP-4} or {PAOP-5} is displayed.
Retirement Fund Start Date	(DD-MM-YYYY)	The date from which the Retirement Fund Component, Fund Category and Fund Factor is effective. When entering this date, it is validated to the Start and End Dates of the Retirement Fund Membership and must fall within these two dates.
Retirement Fund End Date	(DD-MM-YYYY)	The last date for which the Retirement Fund Component, Fund Category, Fund Factor is effective. When entering this date, it is validated to the Start and End Dates of the Retirement Fund Membership and must fall within these two dates.
Retirement Fund Component	A5	The List of Values for this field displays hard-coded values. They are as follows: DC – Defined Contribution Fund DB – Defined Benefit Fund DC&DB – Combination of Defined Contribution and Defined Benefit Fund (sometimes referred to as a Hybrid Fund) This information will be supplied annually by the Retirement Fund provider to the Employer for each member belonging to the Retirement Fund on a Membership Certificate. Please see notes below for additional information
Fund Category	A5	The Fund Member Category is allocated per group of members of the Fund, whose Employer and Employee Contributions have the same percentage of Retirement Funding Income and for whom the determination of the retirement benefit is calculated according to the same method. This information will be supplied annually by the Retirement Fund provider to the Employer for each member belonging to the Retirement Fund, on a Membership Certificate.
Fund Factor	A5	The Fund Member Category Factor is the factor calculated by the Retirement Fund provider for members, per Fund Category and is a mandatory field where the Retirement Fund Component is either ‘DB’ or ‘DC&DB’ This information will be supplied annually by the Retirement Fund provider to the Employer for each member belonging to the Retirement Fund on a Membership Certificate.

Example:

Processing Rules
	No special processing rules.

Additional Information:

Tax harmonisation on Retirement Funds means that the taxation and administration rules have been standardised and the same rules will be applied to all Retirement Funds irrespective of whether it is a Pension, Provident or Retirement Annuity Fund.

All Retirement Funds will fall into one of the following categories, the category determines how the Fringe Benefit on the Employer’s Contribution will be calculated:

Defined Contribution Fund (DC)

A Defined Contribution Fund (DC) is a fund where the rules of the fund calculate an employee’s retirement benefit based on the total contribution made by the Employee and /or the Employer, plus investment growth, less expenses. The value of the retirement benefit is directly linked to the total value of the contributions received, therefore the Employer’s contribution equals the Fringe Benefit Amount.

Defined Benefit Fund (DB)

A Defined Benefit Fund (DB) is a fund where the rules of the fund specify a formula that determines an employee’s retirement benefit. This usually takes into account the number of years of service and the employee’s last /average salary. As the benefit is not based on the actual contributions received for the member, the Fringe Benefit amount cannot be calculated on the Employer’s actual contribution, instead a formula is used to calculate the benefit amount.

FB = (Fund Factor x Retirement Funding Income) – EE contribution excluding Voluntary Additional Contributions

Hybrid Funds (DC&DB)

Some Funds are a combination of Defined Contribution and Defined Benefits and for these types of Funds, the Formula as described above is used to calculate the Fringe Benefit on the Employer’s contribution.

The Fringe Benefit Amount will be deemed to be a contribution paid by the Employee. The Employee will be allowed a pre-tax deduction on all amounts paid into a recognised Retirement Fund /s limited to the annual monetary cap and a percentage based cap, see {FPRG-5} Table Code ‘9998’ for applicable values. This is calculated on the greater of taxable income or remuneration.

For the calculation in the full salary calc {FPRN-2}, single salary calc {FPRN-3} and pro-forma salary calc {FPRI-25}, actual taxable remuneration is determined and the allowed capping amount /percentage is annualised to ensure that the employee receives the maximum pre-tax benefit.

Date	System Version	By Whom	Job	Description
07-Jan-2016	v03.0.0.0	Sakhile Ntimane	t209237	New manual format.
01-Feb-2017	v04.0.0.0	Sakhile Ntimane	t219225	Change image to Integrator4.
07-Mar-2017	v04.0.0.1	Sakhile Ntimane	t219560	Validation of Data