This example shows the accounting entries as they occur within the following logical processes:
- Income
- Investment
- Unitisation
In this example:
- employee A (Ref No. 1) contributes R50.00 (employee contributions = ECS).
- employee B (Ref No. 2) contributes R50.00 (employee contributions = ECS).
- inclusive example:
- the employer contributes R100.00 in respect of employee A and R70.00 in respect of employee B (employer contributions = RCS).
- the costs of R30.00 (administration = ADM) and R40.00 (risk = GLA) are inclusive (i.e. included in the employer's contribution).
- exclusive example:
- the employer contributes R50.00 in respect of employee A and R50.00 in respect of employee B (employer contributions = RCS).
- the costs of R30.00 (administration = ADM) and R40.00 (risk = GLA) are exclusive (i.e. paid over and above the employer's contribution).
- The contributions (net of costs) are split between two investment portfolios (50/50).
- investments are unitised once the unit prices for the portfolios are available.
Note:
The effects of the inclusive and exclusive examples only impact on the member income accounts.