Once the benefit has been authorised all the details captured by the client are available to the administrator.
The first step in the administrator's part of the claim process is to obtain data required for the claim, if necessary, from any external sources. The following are the tasks that could be required, and if applicable, are initiated concurrently.
Units are disinvested from the applicable Investment Houses based on the number of units in the member's accounts. The member's benefit will be based on the unit prices as at the date of disinvestment.
Surety settlement amounts are obtained from the banks. The administrator of the surety is contacted for the settlement amounts and these are manually entered into the system.
The administrator sends a claim notification to the underwriter of the risk benefits. If the arrangement is that the administrator attends to the payment of risk benefits, then the administrator will request the benefit amount and make payment of the benefit to the retirement fund. There will be no further communication with the underwriter.
The member's gross benefit is determined after all the disinvestments in respect of the claim have taken place and the risk benefit has been captured.
When a death event is initiated, the benefit rules used for the calculation are based on the effective date less than and equal to the date of the member status change.
Active member : Calculation effective date
Deferred member : Date of deferment
Pensioner : Date of retirement
If no rule is found for this date, then the latest rule effective is used.
The tax process is started once all the processes in the previous steps have completed successfully. The system will request a tax directive. For all cases where tax directives have to be applied for, a daily file is created for input into the automated SARS system. The tax directive from SARS will be returned via the automated SARS system and this information will be loaded into the system. The benefits to be disbursed (net of offsets) will be determined after the tax amounts have been supplied.
The following process steps complete the payment authorisation process:
- Identify claims that are ready for payment authorisation. A claim will be ready for authorisation if outstanding contributions were received, risk monies were transferred, tax directives were processed, the net benefits were calculated and the administrator is in possession of all the mandatory documents.
- Diarise payments to workflow for authorisation. If a waiting period applies for payment of the whole or portion of the benefit payment, then these payments are authorised when the waiting period expires.
- Determine whether late payment interest is payable. Interest (using variable monthly interest rates) is based on the term between the date the disinvestment money was deposited in the operational account and the date of payment of benefits. Late payment interest is added to the benefits.