CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND
OF STUDY
Pension System ‘is the
income received for a lifetime from an approved pension arrangement, and also
from a non approved pension arrangement by a pension who has retired. Such
payment should be made at least annually. I n addition to the number of the
approved pension arrangement. Another person may be entitled to pension
benefits provided under the pension plan upon the death of the member.
Retirement is one of the most important stages that we may experience in our
lives. Reaching your retirement goal requires smart planning and a disciplined
approach to making investment. So how important should a pension be? While other
retirement options can be a good fit, particularly, if planned sufficiently.
A retirement should be
something to look forward to. It should not be a managing doubt that someone
avoid thinking about while retirement option are ever evolving having a clue about
how a pension works. Definitely, retirement move worry free, according to (Dave
1988). The payroll of a pensioner use to be calculated manually without the
help from a computer. Accountant invest a lot of time and energy in keeping
tracks of all employees, data files and information calculating pensioners
monthly salaries, hourly remunerations, and bonus, deductions, etc. All these are done by keeping numerous files
filled with track records for and every person employed. Nowadays, however
things are simpler than they use to be, because technologies always dedicated
to making things easier and better. Quite a variety of computerized pension
system is available to save us from this tedious task. Now instead of keeping
dozens of files and spending endless hours calculating all employees pension,
all you have to do is to get a payroll software and let it do all the nasty
work. A manual pension system means doing everything with hand while a
computerized one will be enabled it users to store unlimited data keeping track
of everything, whole with manual, it does not to have to keep tracks of
employees by hand. It can even separate regular work hours from over time and
calculate the different remuneration according to set perimeter.
The computerized
pension software will provide accurate calculation regardless of the amount of
data stored. The computerized pension software spends time and money and they
are very easy to use and they are also much practicalised. The program also
allows the monthly payroll of a pensioner schedule to be calculated accurately.
The amount of salary credited into employee or a pensioner’s account is a
variety of their allowances. This pension’s payroll processing application also
considered employee income tax and regulation loan payment details. Based on
their consideration the salary of each employee is deducted at the sources.
Moreover, instead of using a manual pension system which you have to do
everything with hand. A computerizes pension software will enable you calculate
automatically all pay frequency employee statutory reduction, bonus and monthly
pension allowances. In conclusion, the computerized pension system can be done
or calculated with the guide of a program which is the application software and
the operating system. The system is good in for it specialty in the field of
accounting. It also calculates the payroll of a pensioner easily, efficiently,
effectively and accurately.
Prompt payroll
of pensioners salaries by management of an organization boost the morale of
employee and enhances productivity. Manual preparations of pensioners salary
are often associated with a lot of problems which often times disrupt workers.
The problems range from banks arithmetic error in computation, delay in
payment, under payment or over payment. The most common method of keeping the
financial record of a company or organizations manually. The billing machine
which was designed to typewrite names, address,
description to multiply, to compute discount and to add net pay and
posting requisition data to the proper account and so to prepare a customer
bill automatically once the operator has entered necessary information used.
Early accounting machines were marveled of mechanical complexity often
combining a typewriter and various kinds of calculator element. Refinement at
speed and accurate made possible by advance in electronics and operating
complexity of these machines. Many of the newer generations of accounting
machines are operated by a computer to which they are permanently connected. A
computerized pension system will not only resolve difficult problems but also,
it will provide fast process and accurate calculation of the salary of a
pensioner.
In manual
pension system there are so many possible errors that may be encountered but if
the pension system is computerized. Pension system cheque will not need
calculator to compute the salary of any other thing about a pensioner.
1.2 STATEMENT OF THE PROBLEM
- Much time are been wasted during the
process.
- Poor security because it lack central security
point.
- Inaccuracy in payment(either over or
under payment).
- Delay in payment due to queue on the
process.
- Fraud occurred mostly on the process of
file transfer.
- Lose of
data due to movement of paper document.
1.3 AIM AND OBJECTIVES OF THE STUDY
- To reduce
movement of file from one shelve to another, or from one department to
another.
- To reduce lost of file as a result of
caring file up and down.
Iii To
be accuracy in payment (i.e. to avoid over or under payment), pay and
record all pensioners data for
subsequent processing.
- Automatic cheque preparation.
- To prevent Fraudulent in the system.
- Regular
backup data can be taken and backup data can be restored effectively.
1.4
SIGNIFICANCE
OF THE STUDY
Like
any other application development, the significance of this project is
i.
To make work easier, faster for an
accountant
ii.
To keep track of every employee or pensioners
for easy retrieval of data.
iii.
It save time and money.
- The
software is intended to stop the manual movement of file .
- To
reduce errors in the payroll of a pensioners.
- Long
queues of pensioners in the band will be reduced.
1.5
SCOPE
OF THE STUDY
This developed a
computerized pension system that would keep a record of employees or pension
data including their pension plan allowances; gratuity, taxes and net pay, rent
pay and also calculates the pay of the pensioners taking into consideration
employee’s pensioner’s data.
1.6
LIMITATION
OF THE STUDY
At
different stages of this research, some hiccups were encountered that
speed-humped the project. Among them are;
i.
Inadequate fund to finance the project
ii.
Constraint of time: this is as a result
of the research work colliding with academic work schedules thereby reducing
the time for doing the research.
iii.
The employees at the case study were
reluctant to disclose some vital information needed but after much persuasion,
they eventually obliged.
1.7
DEFINITION
OF TERMS
COMPUTERIZED
PENSION SYSTEM: It is a use of friendly service that
will save the time to calculate various pensioners benefit and process the
monthly payment and update cash book text and accurately.
PENSION
SYSTEM: It is the income received time for a life by a
person who has retired.
PENSION
PLAN: It is a method in which an
employee’s transfer part of his or her current income stream towards retirement
income.
PENSION:
This according to Oxford Advanced Learner Dictionary defined pensions as the
amount of money paid regularly by government or an organization or to somebody
that is considered to be too old.
EMPLOYEE
DATA: This is the employee information
in the organization it consists of the employee identification number, employee
name pay rate, pension plan and union number flag.
HOURS
WORKED: This is the number of times
that employees work in a month. The
hours worked is used to calculate the pay that an employee will received for
the month.
NET
PAY: This is the remaining amount of
an employee gross pay after deduction such as taxes and retirement
contributions are made.
DEDUCTION:
Oxford Learner Dictionary define “Deduction” as the process of taking an amount
of money away from a total, the amount that
is taking away is deducted from a pay for tax, pension contributions and
tax deduction.
TAXES:
A taxes consist of state dues and federal dues. A percentage of employee salary
goes to state and country.
PAYSLIP:
Oxford Advanced Dictionary defined pay slip as a piece of paper pay cheque
given to an employee that shows how much money they have been paid and how much
has been taken away from tax.
BENEFITS
OF PENSIONEER
1.
CHECK LIST: before going to calculate a pensioner benefit, employee must
and should the check list form. In this list form, a user has to submit yes/no
conditions, and then only he/she is eligible for pension.
2.
PENSION CALCULATION: after submitting the check list employee is eligible
to calculate pension. Calculation in this form user has
to enter date of birth, date of joining into service, type of retirement
(V.R.Death) Age of retirement and last draw pay based on given input and
standard formulas total service. Pension, family pension, enhanced
family pension. Gratuity and commutation will be calculated automatically and
appropriate report will be generated
3.
PENSION ORDER: In this form user has to enter pension number and date cased
on given inputs pension order will be generated.
4.
PENSION PAYMENT CALCULATION:
Based on retirement date type and pension order date .pension payment
calculation will be done and pension payment calculation sheet will be
generated.
5.
CHEQUE PRINTING: In this form users has to enter
the details like bank account number ,branch, address etc, after cheque
printing process, amount are automatically posted to cash book charges side.
6.
FLY LEAF:
fly leaf will be displayed based on all the above give and calculated data in
standard format
7.
BANK AUTHORIZATION: By using this option users can generate
authorization letter to the bank.
8.
RECOVERY PARTICULAR: If the employee is having any recoveries by using this
option user can enter his/her recovery particulars, while calculating pension
payment these recoveries will be deducted automatically.
9.
NON QUALIFYING SERVICE: If
the employee is having any non-qualifying service by using this option. Users
can enter his/her non-qualifying service will be deducted automatically.
MONTHLY
PENSION PROCESS
MASTER
MASTER
PENSION: This is the master form to
maintain DR detail for monthly process.
DR
MASTER: This is the master form to
maintain DR details for monthly process. Wherever new DR rates for monthly
process.
IR
MASTER: This is the master form to
maintain IR details for monthly process. Wherever new IR rates will be
announced users has to set new IR rate monthly process.
DATA
PROCESSING
GENERATE
MONTHLY DATE: by using this option users can generate monthly data for
pension payment for particular month.
CHEQUE
PRINTING: By using this option users
can be taken printing out cheques. After cheques printing process printed
amounts are automatically posted to cashbook cheque side.
CASH
BOOK:
RECEIPT:
In this form user has to enter the details like name of account, amount, cheque
number, cheque date etc
CHARGES:
Automatically update.