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Provident Fund Trust Mapping in SAP

Former Member
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The client is having its own trust to manage the Provident fund contributions. Every month the amount both employee and employer contributions will be transferred to the trust. The trust will invest these funds in various instruments like fixed deposits as per the guide lines given to the trust for investment. The interest/earnings on investments will be credited to the fund at the end of the year and these earnings will be distributed to each employee account as per their monthly balances

Procedure for employees leaving during the year: At the beginning of each financial year some provisional rate for PF will be declared based on the earlier year earnings. The final settlement will be made to the employee leaving during the year according to this provisional rate. At the end of the year they will recalculate the actual earnings of all the employees including the employees left during the year and adjust the excess/less paid amounts with the pension payable to employees.

Could you please explain how can we map in SAP the following:

1. Distribution of the income earned on the fund to each employee based on their monthly balances. The approximate number of employees are around 3500

2. The adjustment to pension. (i.e the difference between the actual earnings and the provisional amount paid to employees left during the year)

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Former Member
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Former Member
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Hi,

Please follow the points mentioned below try once in testing server and let me know if you have any question.

1. If the trust is registered under any act, create separate company code for trust and all employees of the organization will be created as vendors for that company code.

2. Since it is a separate organization, there will be separate bank accounts maintained by the trust.

3. Transfer employee/employer contributions to the other company code from main company code on monthly basis.

4. When you receive funds from main company code, distribute total received amount to all employees by crediting their individual vendor accounts on monthly basis.

5. Process investment transactions through new company code by creating customer (Depositor) as well as vendor (when disinvestment).

6. Distribute the interest/profit among vendors when ever you require.

7. Settle vendor account by paying credit balance (staff resigned/retired).

Regards

Sarma BH

Former Member
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Hi,

As you mentioned in your mail this is a seperate trust and maintaining seperate bank accounts for the trust.

The income on investments come to know only at the end of year and it has to be distributed to employees accoring to their monthly balances. How and what functionality can be used to distribute this lumpsum amount which come to known at the end of the year accoring to their monthly balances. I thought of using the assessment cycle, but it also distribute based on te actual balances but not on monthly balances..

Former Member
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Hi Sarma BP,

This is with reference to the thread mentioned,

Our Company is Planning to implement Trust Fund Sytem using SAP itself,

Can you help me in understanding the Trust Fund Mapping Process to SAP that you have explained, in detail ?

Would appreciate if you can describe what are the steps that need to be followed for implementing TRUST FUND using SAP FI & HR?

Thanks & Regards

Srijit R Menon

Former Member
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HI Padarti ,

This is with reference to the thread mentioned,

Our Company is Planning to implement Trust Fund Sytem using SAP itself,

Can you help me in understanding the Trust Fund Mapping Process to SAP that you have explained, in detail ?

Would appreciate if you can describe what are the steps that need to be followed for implementing TRUST FUND using SAP FI & HR?

Thanks & Regards

Srijit R Menon

Former Member
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Hi,

Any body can help me in this issue........

thanks & Regards

Srijit

Former Member
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Hi Srijit,

PF Trust we are creating as a new company and employees are created as vendors. In this company code we will implement only the FI Module. HR is not implemented in this company code. Once after payroll run in the parent company the data relating to PF deduction and employer contribution is downloaded from parent company and uploaded in to PF company code through BDC. Any advances given to employees against PF are treated as Loans and employees are created as customers for the purpose these loans. A link between vendor and customer account of employee is established by mentioning the vendor number in customer account and customer number in vendor account. The only problem is distribution of interest/income earned on funds to the employee account, that we are planning to do on trail and error basis using interest calculation by changing the interest rate to interest indicator every time till we get the right % of interest.

Hope this helps to you. award points if useful.