Accounting

The accounting has been designed to be very configurable to embrace the many different accounting models that different pensions products might require. The accounting system uses double entry book keeping and also allows for sub accounts within an account which allows for earmarking of funds. The accounting also handles banking requirements such as payments and receipts and interfaces to external banking systems. Additional interfaces can be developed for other banking systems as required. The finance and accounting module also includes the facility to supports cash reconciliations between the bank and the system. The system supports the concept of “expectations”. Expectations are defined expected events that trigger a cascade of further events such the automation of recordings and transactions. Accounting functions are accessible via both product and policy workshops. Within Imago Back Office, accounting functionality may be associated with any appropriate entity. Imago Back Office has accounting functionality for Schemes, Products, Policies and Arrangements. Imago’s accounting functionality  incorporates:

• Accounts with a related bank account
• Accounts without a related bank account for control accounts and memo accounts
• Financial transactions, including expectations to receive money and straight through payments
• Generation of all account posting entries from financial transactions
• Double entry and self-balancing book keeping
• Use of sub accounts within an account which allows for earmarking of funds
• Payments and receipts interfaces to external banking systems
• Supports for cash reconciliations between the bank and the system
• Imago Back Office supports the concept of “expectations”. Expectations are defined expected events that trigger a cascade of further events such the automation of recordings and transactions.
• Accounts with a related bank account
• Accounts without a related bank account for control accounts and memo accounts
• Financial transactions, including expectations to receive money and straight through payments
• Generation of all account posting entries from financial transactions
• Account configuration
• Imago Back Office has a configurable accounts structure, supporting real world accounts (with bank accounts) and control accounts
• Configurable sub-accounts for earmarking of funds and prioritisation of sub-accounts for allocating funds
• Accounting entries always generated by business transactions, and so there are no journal entries
• Traceability of postings back to business transactions and vice versa

Imago Back Office has a configurable accounts structure, supporting real world accounts (with bank accounts) and control accounts. Configurable sub-accounts for earmarking of funds and prioritisation of sub-accounts for allocating funds (simple implementation at the moment). Double entry and self-balancing books. Accounting entries always generated by business transactions, and so there are no journal entries. Traceability of postings back to business transactions and vice versa.

Sub-accounts are optional and can be configured. Sub-accounts are notional accounts used to reserve money within the a main or notional account. They behave like accounts, in that money can be moved between them and they have a balance. They can optionally be prioritised to allow critical sub-accounts to take money automatically from less critical ones. They play an important part in controlling the intra-day position, particularly with regard to payments, by reserving funds until there is confirmation that funds have moved and at which point the final account posting entries are made. Imago Back Office can present two statement views of the main account, one hiding sub-accounts and any inter sub-account movements, the other surfacing all the sub-accounts and movements.

Arrangements

Imago Back Office provides a fast and efficient means of determining the notional value of each arrangement under a policy. The information for this comes from full valuations of the fund over time and a record of all money movements that directly affect specific arrangement types. The notional values are recalculated from Day 1, and so the effects of any backdated financial transactions, reversals and revaluations are always taken into account. The Imago Back Office approach allows the accounting functionality to be applied to any appropriate business entity. This also allows real valuations to applied to the account set. The fund may physically split across arrangements if required. In fact it is possible to physically split part of the fund and notionally split the remainder.

Banking

Business Transactions

Integrated solution delivers a high level of control and ease of use. The business transaction is the only user interface needed for :-

Cash Management

Within Imago Back Office’s cash management as the composite functionality of accounting, straight through transaction processing, payments processing, expectations, bank reconciliation, regular withdrawals, sufficient funds checks, reservation of funds through sub accounts and finally a cash flow projection to identify future funding shortfalls.

Third party cash holdings may be in deposit accounts held outside the scheme bank and cash held by discretionary fund managers. Deposit accounts are handled directly by Imago Back Office’s cash management. Cash held by a discretionary fund manager will show in the regular valuation to be received electronically by Imago Back Office.

The business transaction is the only user interface needed for making payments, posting to accounts, reversing and refunding. On the receipts side, expectations generate business transactions to post the correct accounts. Rules are configurable for each transaction type. Imago Back Office has an option to have supervisor approval by value of which the approving user must be different to that of the data entry user. Transaction rules tie in to accounts structure. VAT is charged on transactions as required.

The straight through process for financial transactions means that once authorised a transaction will create any respective payments. These will be automatically picked by Imago Back Office’s Cash Management and forwarded to the scheme bank. This does of course assume there are sufficient funds and the bank interface supports intra day payments. An automatic confirmation response from the bank will result in the final account posting entries being generated without any intervention.

Imago Back Office may be configured to calculate and accrue credit interest. Interest may be capitalised on a frequency basis determined for the scheme or when an individual bank account is closed.

Alternately the scheme bank may accrue interest and at the appropriate time, credit the accounts with the capitalised interest. Interest credits can be detected by Imago Back Office in the daily bank transaction feed and used to generate Bank Interest Credit transactions which will appear in the Imago Back Office accounts.

Contributions

Contribution types available:

• Regular and single contributions
• Member
• Employer
• Benefactor
• In-specie

Process:

• Create expectations for automated bank reconciliation process
• System generates regular contribution expectations so that a schedule of contributions is registered
• ‘Start of Day’ system level process imports all bank accounts statements available performing matching where possible.
• Unmatched expectations and unexpected receipts need to be dealt with.
• Tax claims – PRAS processing caters for
• Pre-funded;
• or Wait for monies

CRM

The CRM module is where all the key contact information for members is held. It is also where details of third parties are held e.g. IFAs, stockbrokers, fund managers, employers etc. The system allows storage of different contact types and also how and when these third parties have relationships with the client. It is possible to view the history of these relationships, so that it is possible to see when a client switched IFAs or stopped working for an employer. The CRM module provides functionality to hold all contact related data information associated with the product provider. This means it manages information for users and all parties with vested interests in that respective provider.

The CRM module enables:

Data Load

Imago Back Office can import contact information, GAD data, and valuations through XML files. It has the ability to use IBM Websphere MQ Series to integrate with third party systems; an example of this is a custom integration with a client’s system to load contact and policy information including valuations and also to take a regular transaction feed.

The system also integrates with Imago Front Office, allows users of Imago Back Office to produce annual review illustrations and in future will provide access to all relevant illustrations from the Imago Front Office platform. The interface to Imago Front Office has been developed so as to be easily adaptable to any other illustrations product by making use of an industry standard ORIGO request message.

Typical programmatic interfaces which have been developed include:

• Fetch client details from third party system
• Update client details from third party system (batch)
• Send disinvestment request to third party system

Existing interfaces into Imago Back Office consist of the following:

Document Management

Imago Back Office has an integrated document management and creation capability with Microsoft Office 2007. Letter and reports are created using Microsoft Word. The Imago document management and creation facility, enables the setup of documents that expose data from the Imago database through easy to access data objects within Microsoft Word. This facility could be used amended so that output was sent to a web page rather than to a document.The document engine is responsible for all reporting and letter generation. It also incorporates the recording of versioning of documents produced to provide a contact history for a client record. This module will also be able to produce valuations depending on the system configuration and the data feed from other enterprise systems. Pollicy documents and client correspondence is generated and printed from templates in Imago Back Office’s document generation. Documents are stored as contact events against the policy. These documents can be edited and amended by users with appropriate security rights. There is a complete audit log available that indicates document type, issue date, user create/modify details.

Features include:

Drawdown

Imago Back Office has been designed with drawdown as a key functional feature. To setup a drawdown, a drawdown arrangement needs to be created. The setup of a drawdown arrangement allows the amount being crystallised to be taken in non-equal amounts or ratios from multiple source arrangements.

This process also allows additional funds to be incorporated into an existing drawdown arrangement. Imago Back Office also supports partial annuitisation and pension debits from an existing drawdown arrangement.

During the setup of a new drawdown arrangement or the incorporation of additional funds, Imago Back Office creates benefit crystallisation events which determine the consumption of the member’s lifetime allowance and the allowable tax free lump sum. Imago Back Office will calculate tax due on any excess consumption depending on the member’s wish to take the excess as a lump sum and/or to retain it in the pension.

The quote process must be undertaken as part of a new drawdown setup or the incorporation of additional funds. The quote process determines the maximum income based gender, age, GAD Factor, Gilt Index and the funds available for pension benefits after any tax free lump sum is taken. The member’s required income as an amount and frequency must also be entered. Full reviews take place every three years or at the beginning of the next pension year following a partial annuitisation or pension debit. Imago Back Office adjusts the due date for the next review when a partial annuitisation or pension debit is entered, but still leaves normal three year review cycle in place. Features include:

Expectations

All receipts pass through the expectations process.

Expectations handle all receipts:

Fees

The fees module can be configured to support the tracking and collection of management fees, fixed and percentage fund fees and transaction fees.

Fee structures and standard rates are definable for the product and/or for the sub-product, which could be associated with a distribution channel. Each policy has a copy of the structure and rates prevailing on the date the policy was accepted.

Management fees and commission are separate structures, but functionally are very similar. However one difference is that commission rates may optionally be held against the policy-adviser relation to facilitate calculation of commission to multiple concurrent advisers. Fee structures and rates are user definable. The process for new or amended fees is a controlled and so must be approved by an authorised user before they can take effect.

Fees can be applied to arrangements according to type, financial transactions according to type, Transfers In, Transfers Out, per line of in specie assets transfers, payments according to type. Policy rates may be varied manually on an ad-hoc basis for a particular policy or automatically on a regular basis in relation to indexation according to product terms.

. Features include:

Group

Imago Back Office has a group contribution capability to receive a bulk contribution and disperse it across employee plans as employee/employer contributions. Once the contribution has been received the Imago administrator will start the group contribution process. Features include:

Interfaces

Imago Back Office interfaces with Altus PAYE gateway to submit end of year PAYE returns (P35 & P14s) to HMRC automatically; this interface is due to be extended shortly to include integration with the pensions gateway to provide automatic event reporting, accounting for tax, and scheme annual return submissions. Imago Back Office also supports a number of banking interfaces, these are: i|SITE, HBOS Corporate and RBS Royline.

Investments & Assets

In Imago Back Office, asset management is delivered through the Externally Managed Assets (EMA) workflow. Imago Back Office supports working with a variety of different permissible assets, including property.

The asset management module supports the recording and tracking of externally managed assets, such as TIPS and discretionary funds. This includes the tracking of cash movements and current value of the asset. It is designed to interface to an external system. This module receives fund valuations, and optional records of assets held in funds (for valuation purposes, regulatory checks, permitted investments, reconciliation etc) from the external asset management system.

Each TIP or Discretionary Fund Manager (DFM) agreement is established as an external portfolio by Imago Back Office. The portfolio is a placeholder for a third party control account and for valuations data. The control account is used to record monies sent for investment to the TIP or DFM and monies received from disinvestment. Valuations from TIP providers and DFMs are aggregated with valuations from other TIPs/DFMs and in house investments.

Valuations from externally held assets, including property are imported from the manager and aggregated with other valuations. From aggregated valuations Imago Back Office will get a total value. This value is fed into Imago Back Office’s notional portfolio evaluator to arrive at the notional value of each arrangement.

New business processing

The new business process is where contact information and product / policy information is worked on. New business process incorporates third parties e.g. IFAs, stockbrokers, fund managers, employers etc. Imago Back Office allows the management of different contact types and also how and when these third parties have relationships with the client. This can be a complex process and the system provides configurable eligibility criteria which will help provide future proofing of these often changing legislative restrictions. After eligibility the system allows the setup of beneficiaries, investment options and earnings records. The system is also configurable to set up the required accounts automatically, making the process more efficient.The new business processing module guides the business user through the new business application process, including:

Payments

Payroll

Imago provides a fully integrated payroll module designed to cater for pension payments and the unique options you have associated with pension paymants. This means payments to an individual can be made at various frequencies including monthly, quarterly, half- yearly, annually or ad-hoc. The system allows income to be taken across multiple pension arrangements and will keep track of the PAYE regardless of the frequency.

Imago Back Office can support more than one pay day in a month, using the built in PAYE calculator. Imago Back Office can support multiple drawdown arrangements in payment and correctly attribute income and PAYE deductions/rebates to each arrangement.

 Features include:

• Flexible and Capped drawdown, old USP and ASP arrangements, Scheme Pension and annuities
• LTA Protection and LTA Consumption
• Benefits Crystallisation & LTA Excess
• Payment instructions setup in income arrangement
• Ring-fence income for a variable period
• Payroll automated via workflow
• Pre-payment checks
• Payment rules prioritise method (CHQ, BACS, CHAPS)
• Retry capability
• Calculation of PAYE via embedded tax routines
• Regular and ad-hoc income payments
• Payment of tax free lump sum
• Setup payment batch

TAX YEAR END PROCESSING
The Payroll workshop allows the creation of a PAYE tax year end return. It produces a P60 to member, P35/14 for HMRC. Imago Back Office retains the information of previous tax years. As a result there is no need for a clear down process. Multiple payrolls can be run at an frequencies provide, the tax records for each member are held against the policy records that are then consolidated for that respective year into a tax return. Imago Back Office supports electronic Year End returns.

Pension policy / plan

Products

Reconcilialtions

Imago Back Office can import transactions and balances from the Scheme bank. These files are usually downloaded overnight and reflect all transactions and balances from the previous business day. The download is initiated automatically by the bank’s link software. The reconciliation process may be initiated manually by a system administrator or automatically by workflow when the required files are present in a specified download folder. Imago Back Office’s reconciliation service checks whether the files are properly formatted and any file controls are correct. The files are copied to an archive folder. The reconciliation service first invokes the expectation matcher to determine whether expected receipts are fulfilled by any of the bank transactions. If expectations are matched the required financial transactions are generated along with the account posting entries.

The next step is to match bank transactions to posting entries on the Imago account. Work-items are created for any bank accounts or Imago Back Office accounts with unmatched items. The final step is to reconcile the balances at the bank to those in Imago Back Office, and again work items will be created for any differences. There are three stages:

1. Matching receipts to expectations to generate transactions,
2. Matching bank transactions to account postings to flag both as reconciled, and finally reconciling bank balances to account balances.
3. Use the manual reconciliation receipts form to enter and fulfil expectations, tick off matched items and tick off balance

Refunds

Reversals

Transfers In

Imago Back Office Transfer In data collection is very comprehensive. For post A-day cases, any transitional protected enhancement of rights may be recorded as necessary where Member LTA protection does not apply.

These rights may be entitlement to PCLS greater that 25% of the transfer value and entitlement to early retirement age. It is still possible to record zero lump sum rights where a pension credit is received from a former spouse’s crystallised fund. In complex transfers of multiple arrangements where transitionally enhanced rights are different across those arrangements, Imago Back Office allows the transfer to be split into separate arrangements in the receiving policy.

For “in drawdown” transfers Imago Back Office always creates a separate arrangement of the appropriate type, USP or ASP. The value of the transfer will appear in this arrangement and from the outset there is no risk of the transfer in drawdown value being merged with other arrangements.

Cash transfers always create an expectation on the policy cash account. Any late cash received for dividends and interest from the receiving scheme may be recorded as a miscellaneous transfer against the arrangement associated with the original transfer. Transfers are available from any pension scheme including:

Workflow