Retirement Plan Administration 

Use

Retirement plans can be set up in the Benefits component in the plan category Savings. However, the administration of these plans is more complex than is the case for regular savings plans, and therefore additional functions are required to support the administration process.

Prerequisites

Before you start the administration process for retirements plans, all relevant Customizing activities must be complete. The Customizing of retirement plans involves the following central definitions:

For information on the individual Customizing steps, see the Benefits Implementation Guide (Plans ® Savings Plans).

Features

The administration process is supported by the following functions in the SAP System:

The calculation of retirement benefits and service calculation using the hours-counting method is based on the following data cumulated in payroll:

In order to make this data accessible for calculations in the SAP System and for data transfer to a TPA, it must be copied from the payroll cumulations table to a special infotype. This is done using an extraction program.

Waiting periods for participation in retirement plans can be based on employee length of service (dynamic eligibility). Since eligibility service must be regularly calculated by means of a dynamic eligibility check to ensure that the eligibility status of employees is up-to-date, this is always done in the SAP System rather than by the TPA.

If you determine waiting periods for retirement plan eligibility on the basis of length of service using the hours-counting method (see Service Calculation), you need to run an extraction of the most recent payroll results prior to each dynamic eligibility check.

Employee length of service on which retirement benefit amounts and vesting percentages are based can be calculated in your SAP System or by a third party administrator (TPA).

Projected benefits for retirement plans are calculated by a TPA. Data on which this calculation (and, if necessary, service calculation) is based must therefore be communicated to the TPA and the results of the calculation stored in your SAP System. Data transfer takes place by means of intermediate documents (IDocs).

Activities

The administration process depends on whether the TPA provides a full or partial service. In a full service scenario, the TPA calculates service and projected retirement benefits. In a partial service scenario, service calculation takes place in your SAP System, and the TPA calculates projected retirement benefits only. The system and user activities involved in retirement plan administration are therefore described separately in the following scenarios:

Full TPA service scenario

Partial TPA service scenario