Savings fund 

Purpose

The concept of the savings fund is the deduction of a periodic amount from the payments to the employee. Additionally the company normally contributes the same amount. This amount can vary depending on the employee subgroup. Both contributions are invested in only one bank account, for a certain time period known as: Investment period, which is generally a non-calendar year. The employee does not know in what to invest his/her money, on completing the investment period the employee receives his/her total contributions and the total employee contributions and the total interest produced proportionally to the contribution.

Implementation considerations

The employee contribution is a percentage, to which the default value of 13% is assigned independent of the employee’s subgroup.

The contribution by the company had assigned to it the default value of 100% of the employee contribution.

If the contributions exceed 13% of 10 minimum wages of the applicable Federal District, the surplus funds produce 100% taxes. If you wish to avoid this surplus fund, there is the function ‘Limit savings fund contributions and food allowances’ (MXLIM) that allows you to prorate such contributions.

If the employee is terminated, he/she is not paid the generated interest.

It is important to be able to identify the beneficiaries of this plan and their respective percentages.

Integration

The integration of the savings fund plan into the Human Resources module is acccomplished by using the master data, and, more specifically, by using the Savings plans (0169).

Functions

The Savings fund is administered by means of the subsequent reports:

Balance report for the Savings fund (HMXCSFA0).

Generated interest distribution calculation for the Savings fund (HMXCIFA0).

Payroll run calculation for the Savings fund (HMXCSFA0).

Constraints

At the beginning of each investment period the company stipulates the amount or percentage that must be contributed. This amount or percentage can vary depending on the personnel group, but once established cannot be changed until the subsequent investment period, as in such a case the contributions would not be cumulated correctly.