Where is the administration of the occupational pension going?
With its current cloud strategy, SAP is pursuing the complete shift of its ERP solution for handling HR processes to the cloud. SAP users still have the classic SAP tool, HCM for SAP ERP R/3 (On Premise), at their disposal for HR processes. Alternatively, companies can already use the SuccessFactors cloud platform to map their HR processes. However, it should be noted that SuccessFactors is not a 1:1 version of the previous on-premise HCM solution, but offers a completely different view of HR processes.
Current challenges for SAP usersBy 2030, SAP customers should only use SuccessFactors from the cloud for their HR management.
Maintenance of classic HCM for SAP ERP R/3 ends in 2025, after which SAP will no longer make any adjustments to legal requirements.
With many companies voicing their displeasure, SAP announced a new HCM for S4/Hana (On Premise) in 2022 and promised its maintenance until at least 2030. The prerequisite for using the new, temporary HCM module is an upgrade to the new SAP HCM for S/4 HANA system, a HANA database and, if necessary, new licensing to implement maintenance until 2030.
Implications for occupational pension administration
Companies that have promised their employees a company pension in the form of a pension commitment have usually implemented individual enhancements, usually programmed using ABAP, for the administration of the company pension due to the close relationship between the commitment and payroll accounting.
These individual enhancements will not survive the move to SuccessFactors (or any other HR program).
Even for the transition to S/4 HANA, it is not clear whether the existing SAP enhancements can be used. In particular, the transition will involve a migration of the occupational pension, which is not supported by SAP, as occupational pension administration is an individual extension of the standard HCM module. Thus, redeveloping the occupational pension enhancements for the new HCM would possibly only mean moving the problems back 5 years.
Pension schemes such as pension funds, whose portfolio management is currently based on SAP HCM, are also affected by the SAP cloud strategy. Triggered by SAP's announcement that it was withdrawing the existing SAP ERP HCM from maintenance, combined with uncertainty as to the extent to which functionalities for illustrating company pension schemes would still be available in the longer term, the first pension fund decided to tackle the reorganizing of their inventory management system.
Recommendation for large companies and occupational pension schemes
Get planning security and rely on a holistic solution that is independent of the SAP cloud strategy to manage your company pension scheme.
It is important that the alternative solution can be easily interfaced to your current payroll system (regardless of whether the payroll system is in HCM for SAP ERP R/3, HCM for S4/Hana, or SuccessFactors).
In this way, your occupational pension administration is independent of developments on the market for payroll accounting systems in the long term.
Our holistic solution for occupational pension administration
We would be pleased to introduce you to our solution for the efficient administration of your company pension scheme. Please reach out to our expert Senthuran Sabaratnam.