Pension Administration and Pension Fund Accounting Software

Whatever the plan design, the core jobs are the same:

• Plan setup. Each plan carries its own eligibility, contribution and payment rules, and an administrator often runs several plans at once.
• Member records. Members, beneficiaries and their documents must stay current from enrollment to final payment.
• Contributions. Employer and employee contributions arrive on a schedule, often from payroll, and must be posted to the right member and plan.
• Benefit payments. Pensioners expect to be paid on time by the method they chose, and every payment must be traceable.
• Adjustments and audit. Corrections happen. A sound system records each one so an auditor can see what changed and why.

Defined benefit plans promise a payment based on a formula, so the administrator must track service and contributions and work out what is owed. Defined contribution plans build an individual balance from contributions and investment returns, so defined contribution administration software has to keep each member's account and its investments current. Many institutions administer both kinds, and a buyer should check that one system holds them side by side without workarounds.

The MIMICS Pension Admin module in the Trust Suite manages multiple plans of both types. It follows a plan from inception through the last pension payment, tracking contributions, documents filed, payments made and every adjustment along the way, and it can be localized by the user to fit pension rules in any country. Payments go out by check, ACH, RTGS or wire, transfers are tracked in real time with audit trails, and tax reporting, including 1099 creation, is automated.

Administration answers what members are owed; pension fund accounting answers what the fund holds to pay them. The portfolio needs a book of record for every security, the income received, fees, and a Net Asset Value that trustees and members can rely on.

MIMICS handles this by pairing Pension Admin with Fund Portfolio, which manages equity, fixed income, derivatives, commodities, real estate, repos and other investments, calculates NAV along with management and incentive fees, and interfaces with the MIMICS General Ledger or a third-party ledger. Trustees who want to see risk and performance can add Portfolio Analysis, which runs what-if scenarios and risk calculations by interest and exchange rates on the same holdings.

Retirement savings do not always sit in a pooled plan. Some savers convert balances into annuities; others hold individual retirement accounts. Annuity software has to follow a contract through two phases: accumulation, when contributions and interest build its value, and payout, when regular payments begin. Rates and fees can differ between the phases, and payout patterns vary by contract.

MIMICS Annuities covers fixed, variable and fund-indexed annuities, immediate or deferred, funded by lump sums or ongoing contributions. It tracks rates and fees in each phase, calculates amortization and projection schedules, manages sales and override commissions, and pays monthly, quarterly, semi-annually or annually by check or ACH. For individual accounts, IRA Management imports contributions from payroll, manages vesting and produces statements showing investment allocation and return history.

Some central banks administer pensions for civil servants alongside their work on currency, debt and reserves. These schemes draw contributions from many ministries and agencies and face close public scrutiny. MIMICS offers a separate Pension Admin module in its Central Banking Suite for that role. Contributions and payout schedules sit in one system, payment processing and reporting are automated, every action carries an audit trail, and scheme rules are localized to national law. Where the central bank also manages the scheme's investments, cash flows can pass to Fund Portfolio for valuation.

• Can one system hold several plans of both defined benefit and defined contribution design?
• Is member administration connected to fund accounting, or will staff rekey contributions and payments?
• How are country-specific plan rules configured, and who can change them?
• Which payment channels are supported, and does every payment and adjustment appear in the audit trail?
• Does tax reporting draw on the same records? MIMICS Tax Reporting generates 1099 and 1042-S forms and supports FATCA and CRS using data already held in your MIMICS systems.

MIMICS builds highly customized software, so the answers are shaped around your plans. To discuss your plan administration needs, contact our team.