Purpose
Many enterprises offer their employees additional compensation elements in the form of benefits plans. Examples of benefits plans include profit sharing schemes, savings plans, health plans, and pension plans.
A set of rules stored in the R/3 System determines which employees are eligible to participate in which benefits plans, and their conditions of participation.
This enables an enterprise to offer a specific package of benefits plans to different groups of employees, or even to individual employees.
An individual employee can examine the benefits plans for which he or she is eligible, and then choose the ones that meet his or her requirements.
The Benefits Administration scenario provides an overview of the business processes that are relevant to benefits administration.
Process Flow
Design of Benefits Plans
When a benefits plan is designed, the benefits available to an employee should he or she decide to participate are determined, as well as the provisions that apply to participation in the plan and to how benefits are provided.
Design of Benefits Programs
Specific benefits programs are created for individual target groups at the enterprise. In this way, the benefits plans in which employees can choose to participate or the plans for which enrollment is automatic are determined.
Implementation of Benefits Program
The benefits program is publicized at the enterprise. If necessary, implementation actions are performed to prepare employees for the program's practical implementation. Examples of implementation actions include courses and information events.
Determination of Benefits Offer for Employees
An employee's benefits offer is determined when
In the last two instances, the benefits plans are determined to which the employee is entitled at a fixed point in time, as well as the benefits plans in which the employee currently participates. For each individual plan to which the employee is entitled or in which the employee participates, a decision is made as to whether
If plans must be offered to the employee for selection or adjustment, the appropriate administrator transmits the offer together with additional information to the employee.
Benefits Selection
The employee receives information on
The employee can
The employee transmits his or her request to the employer, together with any documents that are required.
Consistency Checks
The appropriate administrator checks the consistency of the selection made by the employee, including the specified parameters and submitted documents.
The checks determine
If the employee’s selection is consistent, the plans are released for enrollment.
If inconsistencies are discovered, the following options are available:
A check is also performed to determine whether the selection of new plans necessitates changing or terminating current plans.
Termination of Benefits Plans
Termination of an employee's participation in a benefits plan is recorded.
Changes to Benefits Plans
Changes to parameters that affect an employee’s participation in a benefits plan are recorded.
Enrollment in Benefits Plans
An employee's participation in a benefits plan is recorded.
Confirmation of Adjustment to Benefits Participation
The employee is informed of changes made to his or her participation in benefits plans.
Transmission of Benefits Information to Service Partners
Information relevant to service partners that offer specific benefits included in benefits plans is transmitted.
Periodic Accounting for Benefits Plans
Accounting for benefits plans is usually performed as part of payroll. The contributions to be paid by the employer and the employee are calculated for the plans in which the employee participates, as well as the amounts to be paid to service partners.
Updating Employee Benefits Accounts
The amounts that are determined when accounting is performed for benefits plans are posted to employee benefits accounts.
Transmission of Benefits Amounts to Service Partners
The amounts payable as a result of participation in benefits plans are transmitted to the service partners.
Monitoring of the Enterprise Benefits System
The enterprise benefits system is checked at regular intervals or for specific reasons. Costs, return on investment, employee acceptance, and other criteria are analyzed. On the basis of these results, a decision is made as to whether there is a need for action. If so, the required action is defined in more detail.