Customer Checklist Retirement Reforms

Step

Explanation and change required

Check

1

Retirement Fund

Define all the retirement funds in your organisation on the Retirement Fund screen.

Expand                  Parameters

Expand                  Payroll

Double click           Retirement Fund

 Company Retirement Fund

Link the applicable retirement funds in your organisation to the applicable companies. This allows you define different fund factors and RFI calculations per company.

Expand              Parameters

Expand              Payroll

Double click       Company Retirement Fund

 

• Retirement Fund

Select the applicable retirement fund. This is a user-defined list. To edit the retirement fund parameter codes right-click on the drop-down list and click on Edit.

• Factor

Enter the factor specified by the retirement fund on the contribution certificate.

• RFI Calculation Method

The field will be mandatory for other retirement fund types. Specify the way RFI must be calculated. The options are:

• Earning Definition: select this option when a specific earning on the employee’s payslip must be used to calculate the RFI.
• Earning Group: select this option when an earning group must be used to calculate the RFI. All earnings linked to the earning group on the Earning Definition screen will be added together.
• Custom Calculation: select this option when a custom calculation must be used to calculate the RFI.

2

Payroll Definitions

For the retirement reform calculations to be handled correctly, the following payroll definitions must exist in the People application.

NOTE: If your deduction and company contribution definitions for pension or provident are already linked you only need to refer to the fringe benefit definition section

Deduction Definition

A deduction definition must be created for every pension and/or provident fund to which contributions are made irrespective of whether the employee and employer or only the employer makes these contributions. The deduction definition is used to calculate the tax-deductible amount.

Expand          Company Management

Expand          Payroll Definitions

Double click    Deductions

Company Contribution Definition

A company contribution must be created for every pension and/or provident fund deduction. The company contribution must be linked to the relevant deduction definitions.

Expand        Company Management

Expand        Payroll Definitions

Double click Company Contribution

Link the retirement funds defined on the Retirement Fund screen, in step 1, to the applicable Company Contributions Definitions

Previously the RFI calculation was linked on the employee’s Payroll Definition screen. The RFI calculation and the fund factor is now defined on the Company Retirement Fund screen. Therefor the applicable company retirement fund with the relevant RFI calculation and fund factor must be linked to the company contribution on the Company Contribution Definitions screen.

NOTE: The Company Retirement Fund field is mandatory for a  Defined Contribution defined Benefit and a Hybrid fund

NOTE: The deduction definition must be linked to a company contribution. A deduction can only be linked to one company contribution at a time. The Deduction Type and the Company Contribution Type of the linked company contribution must be the same. The Pay Run on Company Rule will be in an error state if there are deductions and/or company contributions that are not linked.

Fringe Benefit Definition

You must create a single fringe benefit definition to calculate the fringe benefit values for all retirement funds. You do not have to create a definition for every fringe benefit IRP5 code. The applicable IRP5 code will print correctly on the tax certificate.

Expand        Company Management

Expand        Payroll Definitions

Double click  Fringe Benefits

NOTE:The fringe benefit definition must be created before rolling over into March of the new year

3

  Pay Run Definitions

Ensure that the deduction, company contribution and fringe benefit definitions are linked to the applicable pay run(s). The pay run will be in an error state if there is no retirement fringe benefit or if the company contribution for a retirement fund does not have a linked deduction linked to the pay run.

Expand            Company Management

Double click      Company Rule

Select               the applicable Company Rule

Select               Pay Run Definitions

Deductions:

Ensure that the retirement fund deduction definitions are added on the applicable pay runs.

Company Contribution:

Ensure that the retirement fund company contribution definitions are added on the applicable pay runs

NOTE: When you add a deduction definition, which is linked to a company contribution,on the pay run the company contribution will automatically be added and vice versa

Fringe Benefit:

Add the retirement fund fringe benefit to the pay runs. If all employees in the company rule has contributions to a retirement fund, it is advisable to flag the retirement fund fringe benefit as mandatory.

4

Recalculate

It is advisable to do a recalculation for the company rule once you have made the necessary changes. The recalculation will update the employee’s payslips if any of the payroll definitions were flagged as mandatory.

Expand               Company Management

Double click         Company Rule

Select                  the applicable Company Rule

Select                  Re Calc All

5

Remuneration Structures

If you make use of remuneration structures, you have to link the deductions and company contributions to ensure that the employees’ payslips are updated correctly. If the fringe benefit is not mandatory this will have to be linked on the remuneration structure as well to ensure that the tax is calculated correctly.

Expand                Company Management

Double click          Remuneration Structure

Select                   the applicable Remuneration Structure

Deductions:

Link the retirement fund deductions that will be added on the employees’ payslips automatically when they are linked the remuneration structure.

Company Contributions:

Link the retirement fund company contributions that will be added to the employees’ payslips automatically when they are linked the remuneration structure.

Fringe Benefits:

Link the retirement fund fringe benefit that will be added on the employees’ payslips automatically when they are linked the remuneration structure.

NOTE: The linked definitions will not be added automatically when you refresh an existing remuneration structure. When you create a new remuneration structure the linked deduction or company contribution will be added automatically when the corresponding company contribution or deduction definition is linked.

6

General Ledger:

Ensure that GL account numbers are updated if new definitions were loaded.

Expand                     Company Management

Double click               GL Setup

Double click               the applicable GL setup

Double click               Account linking

Double click               Refresh Account linking

For a guide on how to link account codes on payroll definitions click here.

7

Employee Retirement Fund

The employee and/or employer contribute to a defined benefit or a hybrid fund you must define the retirement fund information on the Retirement Funds screen.

Expand           Employee Management

Double click    Employees

Click on          Contracts and Benefit Funds

Click on          Retirement Fund

Click on          the New button to create a new record

Retirement Fund: Select the applicable retirement fund.

Company Contribution Type: This field will default from the Company Retirement Fund setup.

Fund Definition: This field will default from the Company Retirement Fund setup.

Fund Factor: This field will default from the Company Retirement Fund setup.

Override: Check this checkbox if you want to override the fund factor for the employee should it be different from the factor defined on the Company Retirement Fund setup.

Override Factor: This field will be enabled once the Override checkbox is checked. Enter the factor that must be used to calculate the employee’s RFI.

Retired: If the employee is retired according to the fund rules no calculations must be done for the employee. Check this checkbox to indicate that an employee is retired according to fund rules.

8

RFI and Fringe Benefit Adjustment Batch

You can batch the RFI and Fringe Benefit Adjustment fields on the employees’ Payslip Detail > Tax Total Retirement Funds screen.

Expand         Utilities

Expand         Batches

Double click   User Defined batches

Add the adjustment field(s) for the applicable retirement fund.

9

Backdated Adjustments

Where the retirement fund setup or fund factor was defined incorrectly, and the employees’ fringe benefit amounts should be recalculated you can apply the Force YTD option.

Recalculate an Employee

If you made changes to the employee’s retirement fund or fund factor and the changes must be applicable from the start of the tax year you can apply the Force YTD option on the employee’s payslip.

Expand             Employee Management

Double click      Employees

Click on            Payslip Details

On the ribbon of the employee’s Payslip Detail screen click on the Force YTD button. The employee’s tax-deductible amount and fringe benefit value will be recalculated.

Recalculate a Company Rule

To recalculate the changes for all the employees in a company rule select the Force Average YTD option for the Live period.

Expand          Company Management

Double click    Company Rule

Select             the applicable Company Rule

Check the Force Average YTD Calculation checkbox for the current (Live) pay period. When you save the changes, the following message will be displayed.

Click on OK.

To complete the recalculation, click on the Re Calc All button on the ribbon.