Capital Systems
Informatikai Kft.

Szépvölgyi Irodapark
H-1037 Budapest,
Montevideo u. 7.
Tel.: +36 1 436 7230
Fax: +36 1 436 7239
capsys@capsys.hu


Pension

Capsys has designed and developed a sophisticated and comprehensive application to administer pension funds of those markets where the World Bank-promoted 3 Pillar Pension System was introduced. Capsys Europé is used to run the 2nd and 3rd pillar pension funds, that is, the mandatory and the voluntary schemes.

Three pillar pension model 

Pillar one
This intergenerational solidarity based model is funded by mandatory, tax-like pension contributions deducted from wages and salaries. This pillar is run by the government: contributions are typically collected by the tax authority, funds are handled by the state treasury, and pension benefits are paid out by the pension agency. The model is also characterized by the fact that an individual’s contributions and benefits are not linked directly (i.e. administered in individual accounts), rather, the contributions go into, and the benefits are paid from the pool. The model and pillar one is generally called: Pay-As-You-Go.
 
Pillar two
This privately managed, individual account based model is similar to the pay-as-you-go model only in the fact that the pension contributions are mandatory. While the collection is typically done by the tax authority, the administration, asset management, and pension benefit services are all carried out by private companies, so called pension fund administrators. Pillar two is generally called: Mandatory Pillar.
 
Pillar three
This model is based on the idea that individuals would set aside voluntarily savings for their pensions. These pensions are privately managed and are administered in individual accounts by professional pension administration companies. Pillar three is called: Voluntary Pillar.
 
 

Introduction to Capsys Europé

 
Capsys Europé is an integrated back office system for pension fund administration organizations supporting the 2nd and 3rd pillar pension funds. It offers a comprehensive solution for administering both voluntary and mandatory pension funds. The system covers all aspects of pension fund administration, from personal account management, to collection, from asset management to investment controls, from NOSTRO/LORO consistency check to disbursements. While Capsys Europé is closed and robust, it provides transparency and controls over fund administration, as well as secure management of the pensioners’ assets.
 
This well-scalable and flexible system provides:
  • Complete administration of pension accounts and pension services
  • Unit or currency based administration,
  • Cash-clearing administration,
  • Asset management administration,
  • Multi-currency,
  • Multi-language,
  • Document management and,
  • Commission calculation and settlement.
 
The system is linked to the following systems through automatic or manual interfaces:
  • Member recruitment system – import of adherence acts, scanned images
  •  Home banking system of Depository – import of bank statements for collector, investment and other accounts, export of transfer orders
  • Custody – import of securities settlements
  • Asset Manager’s administrative system – import of list of trades
  • General Ledger – export general ledger upload

 

 
Complete, off-the-shelf system
•         The application meets complex legal and process requirements and can be tailored to meet most needs through parameter settings
•         Covers the different requirements of different legal and market environments like
•         Centralized or de-centralized collection processes,
•         NAV and Yield Distribution,
•         Both Unitized and Currency Based (yield allocation) models,
•         Payout: lump sum, annuity, and combined,
•         Sales, CRM and recruitment,
•         VIP accounts
•         For added convenience, the application has a built in Document Management functionality
 
Capsys Europé has been designed to enable efficient operations
•         Complete pension account administration for fund members and employers
•         Highly automated processes have been built into the system to promote efficiency and to reduce risk.
•         The application keeps efficiency in focus. Here is one example: entity based core data administration. For every person or legal entity only one entry into the application is necessary. Different parameters can be turned on for different roles of them, like a person can be a fund member, an employer (as self employed), a user of the application, a proxy, an heir, just to name a few, and there is no multiple entities for him in the core data. It has a result for example that a change in the permanent address of a natural or legal entity has been done for all roles at once by entering the new data.
•         One system – many instances: Europé supports the administration of many different pension funds in one implementation.
•         The application is very stable as it is optimized for high transaction environments, and as such is a Six Sigma quality application
•         Upon implementation existing process redundancies are eliminated by the application.
 
Reducing operational risk
•         Capsys Europé was made to enable prudent operations:
–        Closed system, closed processes: only authorized and authenticated users are allowed to access the system, and only through screens that lead them through the workflow.
–        Traceable and reportable processes and balances: all processes and balances are recorded, no information is lost.
•         The application allows no data manipulation without an audit-trail
–        Multi-level user administration: operating system- , database-, and application level user access rights administration ensure that users have access to the functionality necessary for carrying out their individual tasks.
–        All user activities are logged for complete and unalterable audit trail.
•         Reducing human error
–        Automated processes have been created for efficiency as well as to reduce the chances of human error.
•         Data control (value, syntax) functionalities are built into Europé for validating data accuracy
•        Separate analytical and general ledger systems: Capsys firmly believes that mixing analytical and general ledger functionalities is inefficient. One of the many arguments we make, is that separate analytics and balance sheet accounting allows for consistency and accuracy control.

 

 

Core functions
 
  • Core data administration
    Entity based core data administration provides efficiency, as each entity is only registered once in the application, while it can assume many different roles, such as fund member, beneficiary, system user, system user or administrator, employer, etc. Data accuracy and completeness is checked by Europé through parameters.
  • Contribution administration
    A complete and uniform workflow exists in Europé, supporting both centralized and distributed collection processes. Automatic and manual processes are available for statement to payment matching, as well as processes for rounding, contribution commitments, over- and underpayment, etc.
  • Investment administration
    In-house and/or outsourced asset management, multi-portfolio, elective portfolio, yield distribution or unit based model, multi-instrument, multi-market, multi-currency settlements, income collection.
 
  • Payout
    All payout attributes can be set through parameters, whether it is lump sum or installments or lifelong annuity, or transfer to another fund, or heir/beneficiary. Taxes and fees are deducted and automatically reported to regulators.
 
Supporting functions
 
  • Management activities
    Operational management reports and lists, internal control queries. Data upload to data warehouse.
  • Sales
    Member recruitment and commission settlement functions, direct mailing, announcements, analytical reports.
  • Customer service
    Fully detailed member information screen, data transfer to web based client information service application.
  • Document management
    Fully integrated into Europé, handling paper based and electronic documents. Barcode feature. Documents are organized into hierarchies, and their lifecycle is defined in Europé.
  • Finance / Accountancy
    Europé provides three views of the fund: pension accounts view, investment accounts (or assets) view, and Nostro (or physical location of assets) view. The view show the fund from the following aspects: whose is the fund, what is the fund invested in, and lastly where is the fund held – or: WHOSE-WHAT-WHERE. The view show an equal balance at any given time. Full, workflow based administration of incoming and outgoing payments. Europé, as an analytical system, integrates with general ledger systems.
  • IT
    User, access administration (user admin). Automatic back-up checking, starting test restores. Automatic processes controls (i.e. night routines, G/L uploads).
 

 

Software

Client-server solution

  • Client side
    • User screens are optimized for workflow processes and business logic
    • No business logic stored on the client side
  • Server side contains unified business logic
    • All business logic is implemented in stored processes on the server side
    • Real-time transaction administration, booking
    • Optimized data structure and transaction administration
    • Large number of users (LAN-WAN connection)
  • Uniform source code at each client
    • Scale of economySupplier is responsible for source code errors
  • Delphi, IBM Informix Dynamic Server
Software Architecture:

 
Hardware
  • IBM, SUN, HP
    • UNIX platform (Solaris, AIX, HP-UNIX)
    • IBM iSeries OS/400, AIX certification

 


OTP Bank
Honved Voluntary and Mandatory Pension Funds
ERSTE Bank