Allocations at Main Scheme Level

Overview

The following applies for the receipting of a deposit for multiple Sub-Funds (Participating Employers) within an Umbrella Fund and the processing of a single payment at the Main fund level for multiple Sub-Funds.

Examples of payments made at the Main Fund level for a number of Sub-Funds are:

-   Investment fees paid to Brokers

-   PAYE payments to SARS

-   Investments where the funds are invested at the Main Scheme level

The PAYE payments are done using the Bulk Payment process.

Other payments made for Private Funds where the payment needs to be split by an Account Qualifier e.g. Expense Type or Investment Portfolio, are done using the Payment Allocation.

The splitting of a payment between Sub-Funds can only be appropriate where the Sub-Funds use the same bank account.  If separate financial statements need to be produced for the Sub-Funds then the Sub-Funds portion of the Main Fund bank account needs to be included in these financial statements. 

The following is an example of the accounting transactions required to achieve this:

The BANK ALLOC accounts will be cleared at the main fund level when the sub-fund entries are posted to the Main Fund.  At the Sub-Fund level the BANK ALLOC account will represent the Sub-Funds allocation of the bank account.

The bank reconciliation must be done at the Main Scheme level.

Accounting activities

The following Accounting Activities must be created:

Note:

This list of accounting activities is not exhaustive and if allocations are required for any other purposes then additional accounting activities must be created.  A BANK ALLOC rather than two separate accounts e.g. a payment allocation account and a deposit allocation account so that a single bank account can represent the Sub-Umbrella Schemes portion of the bank account.

Bulk payments

When the Create Payment button is selected on the JU2CM Bulk Payments - Select Payable Records screen, the system will create accounting activities as follows:

Bulk Payment transactions:

Sum of transactions for all members per sub-scheme:

Individual transaction for each member included in payment:

Cash flow report

The Cash Flow report will retrieve transactions from both the BANK account and from the BANK ALLOC account. 

When retrieving the other leg of the Business Transactions (BT’s) in the BANK account for the Cash Flow reports, if the account for the other leg of the BT is BANK ALLOC then the system will retrieve the BT’s for which the Debit or Credit account is BANK ALLOC and the account for the other leg of the BT is not BANK, to determine the Accounting Activity or Account to include in the Cash Flow report in the same way as the BT’s are retrieved for the DEPOSITALLOC and PAYMENTALLOC accounts.  The Sub-Umbrella Scheme Code will be displayed on the report.

If the Pooling Status of the Scheme selected is Sub-Umbrella, the system will retrieve the BT’s from the BANK account and the BANK ALLOC account.  For the BT’s retrieved from the BANK ALLOC account the system will find the other leg of the BT to find the Accounting Activity or Account to include in the Cash Flow report in the same way as the BT’s are retrieved for the DEPOSITALLOC and PAYMENTALLOC accounts.

If the other leg of a BT retrieved from the BANK account is DEPOSITALLOC or PAYMENTALLOC, the system will find the BT for which the other leg is not BANK account to find the Accounting Activity or Account to display in the Cash Flow report as per the current functionality.

Note:

If the BANK account transactions are processed at a Main Scheme level then there should not be any BT’s retrieved from the BANK at a Sub-Umbrella Scheme level as the BANK account transactions will be processed with the Main Umbrella Scheme Code and the BANK ALLOC account transactions processed with the Sub-Umbrella Scheme Code.  However there may be exceptions to this where payments are made or deposits receipted for a specific Sub-Umbrella Scheme.