Paying out an Invalidity Pension 

Purpose

As soon as an employee suffers a disability, you must create the bases for payment of an invalidity pension. To do this, make the necessary changes to the degree of invalidity in the Basic Data PF infotype (0278).

For invalidity pension, you can pay the benefits using the same personnel number. The pension is paid out with the payroll run, and does not have to be included in the PF. In this case, you cannot post the pension to the PF accounts.

Prerequisites

The insured person was not previously seen in the system as having an invalidity; that is, with a 0% degree of invalidity

If an employee becomes eligible for invalidity pension, you must make a distinction between the following cases:

Full invalidity

The degree of invalidity is 100%. In this case, the employee is not active. Therefore, you must process retirement with invalidity benefits instead of age-related benefits.

Minor degree of invalidity

The degree of invalidity that usually qualifies for pension payments is between 30% and 50% (LOB: 50%).
If the degree of invalidity is so low, that no invalidity pension is paid out, the employee is considered as active in the system.

Partial invalidity

If the degree of invalidity is so high, that the employee receives a partial invalidity pension, the benefits are correspondingly reduced.

 Note that the capacity utilization level in Basic Pay infotype (0008) is comprised of reduced working time (reduced wages due to part-time employment) and reduced income due to invalidity. If an employee works at 50% (the capacity utilization level in Individual Values PF infotype (0279)) and has a 60% degree of invalidity (degree of invalidity in Basic Data PF infotype (0278)), the employee has the capacity utilization level of 20% (50% multiplied by (100% - 60%)) in the Basic Pay infotype (0008). In the standard system, this situation is set as a default. In individual cases, you can assign a different meaning to the terms.

Procedure

To set up the basis for paying invalidity pensions, proceed as follows:

  1. HR department: Create a new personnel number for the employee, which is used to pay the invalidity benefits.
  2. HR department: Adjust the pay data
    Pay data and the capacity utilization level in Basic Pay infotype (0008) are modified.
  3. PF: Delimit the Basic Data PF infotype (0278)
    with the new value for the degree of invalidity.
  4. PF: Determine the current invalidity benefits using the insurance statement or online-reporting.
  5. HR department: Enter the employee as a pensioner under a second personnel number
    This personnel number is used to pay out the pensions. For each of the employee’s funds, you must create a new Basic Data PF infotype (0278) for this personnel number.
  6. PF: Delimit the Individual Values PF infotype (0279) for the active employee. The system uses the modified pay data to adjust (that is, reduce) the insured person’s pay and contributions.
  7. PF: Recreate the Individual Values PF infotype (0279) for the pension recipient.
    The infotype 0279 should now contain the pensions and cost-of-living supplement fields. Here you enter the invalidity benefits with the same amount as in the corresponding payroll infotypes.
  8. PF: Create a passive account (account type 02 ) for the pension recipient.
    The subsequent paid-out pensions are posted from payroll to this account. It is advisable to assign the new account to the personnel number of the active employee as well. (For more information, see     Account Management, and Account Maintenance).
  9. PF: Allocate savings credit (contribution plan)
    In the contribution plan, allocate the savings credit with the ratio (100% – degree of invalidity) : Degree of invalidity to the active and passive account. If necessary, you can use the leaving simulation to determine the current savings capital, as the insurance statement only takes previously-posted contributions into account. The invalidity payment is then posted from the active account. Standard: Posting with the value type KAI0 and a negative (-) sign. A corresponding posting is created as a positive value in the passive account (Standard: Value type: KEI0).
  10. PF: Allocation of the termination benefit (BP)
    The benefit is reduced by posting the invalidity payment of the termination benefit (Standard: Value type KAI0) from the active account (consequently, a posting with a negative (–) sign). A corresponding subsequent posting (pension reduction, negative credit for the length of contributions, and so on) results in a reduction of benefits.
    The corresponding amount can be posted to the passive account with a positive (+) sign (Standard: Value type KEI0), for information purposes.
  11. PF: Allocation of LOB age-related credit
    The LOB age-related credit is also allocated to the active and passive account with the ratio (100% - degree of invalidity) : Degree of invalidity. Note that the degree of invalidity for the LOB can differ from the degree of invalidity valid for the PF.
    First, you must determine the LOB age-related credit invalidity payment. Then you post it to the active account (negative with the value type KABI), or to the passive account (positive with the value type KEBI).
    You post the LOB-coordinated wage (value type LNBI) to be used for the subsequent calculation of the LOB age-related credits.

Result

The system now contains an accurate representation of the employee’s invalidity and the PF-data is modified accordingly.

See also: