Client business and its challenges
Our client is a leading insurance service provider from Ghana, Africa who is licensed by the National Pension Regulatory Authority (NPRA) to serve customers and manage pension scheme activities within Africa. The client ensures timely registration, appoints fund managers and custody activities to occur with respect to regulatory compliance and investment policies on behalf of the customer. In addition to pension investment, the client was also a consultancy and training provider of pension-retirement planning and investment. To ensure seamless management of pension among the senior citizens, the client decided to go digital by developing an application that would benefit the management. The primary aim of the application was to enable the application with the following facilities
- Self-Registration of Employee and Employers which can be verified by Administrator
- Provision to define the rules and regulation for each scheme as per government laws
- Provision to manage the monthly payments
- Provision to manage the fund amount by each scheme, Fund, Assess Class and Employer each month
- Automatic calculations of Net Asset Value (NAV) and Units based on the fund submitted
- Provision to manage beneficiary and other details of individual
- Facilitate to manage the multiple custodian banks and manage the fund by the scheme and assess class
- Follow the government rules and NPRA regulatory advisory
- Provision to generate the various statements and reports
Tools & Technology
ASP.NET • MVC • SQL Server • Windows Azure
The client approached TatvaSoft with its unique requirements for developing a Pension Trust application. The application needs were fixed and meticulous attention was needed while developing it. TatvaSoft assigned top-notch .NET developers to understand and comprehend how to implement this idea into a technology solution. Initially, our developers constantly communicated with the client to understand his process and workflow of the application and later outlined the project scope.
The amount of money in each Pension Scheme comprises of four components representing the value from the number of Employees that have signed up for each of the four Investment Fund types (i.e. the Growth, Balance, Income and Default Investment Fund). Contribution deductions for the Occupational Pension Schemes is 5 percent of the Employee’s salary. Our solution is designed to address all the prerequisites of the client. We developed the application that would perform auto deduction from the Provident fund of the employees by a specific percent as per the discussed rate or percentage.
There are five types of users who are dealing with the system.
- Pension Trust Administrator
- Employers or Organizations
- Employees of particular Employers
- Custodian Banks
- NPRA Officials
The developed System enables configuration of different Investment Fund Types, and the Pension Scheme Master Trusts. Each type of Master Trust has a different contribution percentage or absolute amount for employees and employers. The amount is validated before the contribution data is processed. The system has document management capabilities, with workflow capabilities especially on registration and benefit payment and processing side. The Griaule Fingerprint SDK System was considered for the fingerprint software. The Adobe Echo signature Software was considered for the electronic signature.
Each Employer can belong to one or more of the three categories of Master Trusts (i.e. OPS, PFS or GPPFS) but to only one in each category. All Employees must belong to the Master Trust that has been signed up by the Employer. Every Employee selects one of the Investment Funds (Growth, Income, Balanced or Default) at the time of registration forms. The total amount of money in all the various Master Trusts, broken up into each of the four Investment Funds shall constitute the Total Secure Pensions Trust Fund.
Transfer of Investment Fund Option
The percentage of the total fund in each of the four investment fund types is derived from the number of employees from all the various employers that opt to belong to that investment fund and their contributions. This varies as more people sign up for each investment fund or leave the investment fund. People can move to a different investment fund only after a period of two years.
Each custodian can be set up with one or more specific external fund managers who manages only one asset class each by default. The asset class and percentages allocated to each fund manager by the custodian shall be set up at the time of registration of the custodian by pension trust.
At the end of the month, each Custodian can update the Fund Balances on the Trust System via web portal. This includes details of dividends, commission charges, brokerage charges, and any other charges or gains. The updates are at the detail of the Custodian/Fund Manager/ Asset Class.
Once the new balances have been entered onto the Trust System, the system needs to update each member’s account (each employee’s contribution account) and recalculate the unit value of each of the various investment funds from each Master Trust Scheme for each member. For each type of dividend or charge, the system must apportion equally to all members of that particular fund. Hence the Net Asset Value of each Fund can be recalculated at the end of each month after all of the custodians have updated the fund balances and each member’s account is also updated.
Penalty and Accrual
Once monthly contribution payments have been made, The Trust can then apportion the payment to all employees. If the payment is short, then each employee's contribution amount paid is less than what is expected. For payments that are late, there is a penalty of 3% which accrues. We need to keep track of expected contributions, actual payments for contributions, penalty accrued for each month, and penalty payments received. All these amounts are apportioned to each employee’s account of the Company in question, who are in effect members of the scheme.
Details of expected contributions, payments, penalty payments, and penalty accruals, brokerage charges from the fund managers, commissions, bank charges, and dividends, etc. needs to be maintained in a ledger. Any financial activity that occurs from managing the fund and administering the pension trust has apportioned all employees belonging to a Master Trust Scheme and we have to maintain this detail of account for the employees who are contributors of the various schemes. We should be able to add new charge types at any time.
Shift to a new Scheme
If an employer decides to move to a different Pension Trust, the system will transfer all of their employee’s data to the different pension fund with all the details. Likewise, if a new user signs on a new company, the system will import all the data from whichever Pension Trust they come from.
Biometric data is collected by visiting employers’ sites at some point while the employees are registering. The Trust signs on employers who in-turn views that all their employees all register online. The employer is responsible for checking that the data provided by the employees are accurate and complete. So once an employee has completed the online form, the employer has to validate the biodatas like names, dates of birth, etc. The employer should however not be able to see the choice of Investment Fund of the employee or the list of beneficiaries. The employer can then electronically sign and stamp the employee’s registration form.
The system provides an interface to the NPRA for a full audit of the system and process. NPRA members should be able to view member’s account details, fund type details like monthly contribution additions, dividends, charges, surcharges, penalty accruals, penalty payments, etc. Users should be able to select the filters and output parameters to generate the ad-hoc report.
The system integrates seamlessly with an SMS gateway to send SMS messages to members whenever necessary. The system should also be able to send emails to members in a company together or based on certain criteria, for example when payments are late. The system also has online forms of capabilities for registration and benefits processing. The system has the capability to do fingerprint and signature verification before benefit payment processing is done.
We developed this Pension Trust System considering the following major components
- Employers and Employee Management
- Custodian Banks and Fund Managers
- Contribution Management
- Fund and Scheme Management
- Retirees Management
- Benefits Paid Management
- Asset Classes
- Payment and Receipt Management
- Monthly Contribution and NAV Calculation
- General Reports
- NPRA and Ad-Hoc reports
Some of the remarkable features of the Pension Trust System are
- Pension Trust Admin Panel – Setup Process
- Investment Trust Funds
- Pension Scheme Master Trusts
- Employers Management
- Employee Management
- Custodian Banks
- Fund Managers and Asset Classes
- Adobe Echo Signature for Employee and Employers
- Griaule Fingerprint
- Emails and SMS Notifications
- Employer Monthly Contributions
- Accrued Benefits
- Unitization: Calculation of Net Asset Value of Fund
- Manage Members Fund balance
- Manage Penalty on Outstanding Contribution Payments
- General Ledger Financial Statement
- Account Transactions
- Export/Import Account
- Benefits Processing and Benefits Payment
- Verification of Member
- CRM – Complaint management
- General Reports
- NPRA Reports
With extensive domain expertise in custom software development we delivered this challenging project for clients to aid benefits in leaps and bounds. We developed Pension Trust System for businesses to provide a proper roadmap that helps to employers, employees and pensioners. This application has benefited the client to streamline their manual process to online and improve overall functioning. It has also enhanced customer satisfaction by helping to complete projects on time and within the budget with adherence to project plans. With this the client can also offer better flexibility to their clients which allows the user to map out the strategy to accomplish the project.