Treasury Practice

Problem Solved: Susan Wedgbury, Fujitsu

Published: Nov 2008

The UK-based Fujitsu Services Pensions Administration team manages three individual pension funds and a Common Investment Fund.

Susan Wedgbury

Treasury Systems and Back-Office Manager

Fujitsu Services designs, builds and operates IT solutions and services for customers in Europe, Middle East and Africa. Fujitsu Services is part of Fujitsu, which operates in 70 countries and employs 160,000 staff worldwide.

Problem…

The pensions administration system database receives data from AVCs (additional voluntary contributions), pension fund providers, the Department of Work and Pensions, and the Fujitsu Services HR and Payroll systems, which is then used to perform calculations and generate payments and receipts for each pension scheme.

The existing solution and end-to-end pensions accounting processes were robust and had received outstanding audit reports and commentary. The problem that confronted Fujitsu related to the ageing legacy system used to carry out the cash management and pension fund accounting. As a result, the Fujitsu Services pensions trustees initiated a project to review, update and streamline the pension fund cash management and accounting processes, which included pension accounting, payment processing, reporting and accruals, investments and management reporting. Much of this was carried out using spreadsheets.

“The cash management process for the pensions administration function was highly manual and the trustees therefore required a solution that would eliminate the requirement to re-key financial data and systemise processes, providing a clear audit trail,” says Susan Wedgbury, Treasury Systems and Back-Office Manager of Fujitsu Services. It was also hoped that the new solution would eliminate dependence on spreadsheets, provide capacity for expansion and enable the automated production of key financial statements and reports for review by the trustees.

The chosen solution would also need to ensure the complete segregation of pension data from corporate treasury data, to comply with the rigid requirements of the Pensions Regulator. In compliance with these regulations, the Fujitsu Services Treasury team does not perform any pension administration activities, or provide any cash management or accounting services to the pensions trustees.

…Solved

Accordingly, the pensions trustees decided to replace the existing manual cash management solution with a proven and secure treasury management system. “Our search focused on the IT2 treasury management system, which is used by the Fujitsu Services Limited corporate treasury in Slough, UK,” says Wedgbury. “Fujitsu Services corporate treasury had been using IT2 productively for about six years when the pension funds automation project took place in 2007. Therefore the treasury team had a strong understanding of IT2’s capabilities to deliver a best practice STP solution for a treasury’s cash management, accounting and risk management requirements.”

In order to ensure the segregation of corporate treasury and pension data, data access profiles were created in IT2 for both organisations. Each IT2 user was then assigned the appropriate data access profile. “IT2 enjoys the technical and reporting efficiency benefits of being based on a single central system and database; but the system can be configured through standard implementation processes so that it is fully partitioned where required,” says Wedgbury. “Once set up, IT2 can prevent staff in one treasury centre viewing, editing, or deleting items belonging to another (including transactions, counterparties and bank account records). For Fujitsu, this ensures that treasury personnel cannot access, view or process pensions data – and vice-versa – as required.” Pension funds cash accounting is now fully operational at Fujitsu Services.

One of the main highlights of the IT2 solution is that IT2 has the power and flexibility to support four different accounting frameworks for the three pension schemes and the Common Investment Fund operated by Fujitsu Services. This enables the required management reporting to be generated accurately for the 14 investment managers, through an efficient, automated process. The IT2 solution is also expandable, allowing for additional pension funds to be added as required, and the solution automatically posts all the required accrual accounting entries and reports. Finally, IT2’s flexible workbench and reporting functionalities have enabled the elimination of spreadsheets in the production of quarterly and annual reports to the pensions trustees.

IT2 is presently working on some additional checks on the file import process, and adjusting the journal reversal process. Future enhancements will allow for the fully automated creation of cash postings and journal entries from the pension administration database. These will update the IT2 cashbook and the IT2 Nominal Ledger – an integral IT2 module – eliminating the inefficiencies, error potential and costs of having to re-key the data into a separate accounting system. IT2 automatic bank account reconciliation will then be used to reconcile pension fund bank account information to the cashbook entries.

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