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This report is intended for use by the management of the Variable Annuity Life Insurance Company ("VALIC") and its subsidiaries.
VALIC Retirement Services Company ("VRSCO") and VALIC Financial Advisors, Inc. ("VFA"), its user entities, and the independent
auditors of its user entities, and is not intended and should not be used by anyone other than these specified parties.
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The wire reports generated by the remittance processing module of Retirement Manager are reviewed and
approved. The Common Remitter teammember uploads the wire instructions to the Open Link Extension (OLE)
system and then reviews the system status report to ensure the success of wire file uploads. Treasury then
releases the wires. If the vendor is paid by check, the remittance processing module of Retirement Manager can
automatically feed the check payments into SAP and the check writer system.
Loan Payments
Participants remit their loan payments to VALIC per the loan agreement, which outlines the method of
payment. In general, the product offering and, therefore, type of loan determines the means of payment. An
independent quality review is performed to ensure accuracy in applying the loan payment to the participant’s
account. If all payments were allocated correctly, the payment is approved for processing. If an error is found,
the quality review will flag the payment and correct the allocation
(3.9)
. Automated controls within AWD
require an independent quality review
(3.11)
.
For group mutual funds, loan payments can be debited from the participant’s personal account through ACH or
participant loan payments can be made through payroll deduction in agreement with the plan sponsor.
The payment method of loans under group annuity contracts allows for payments to be debited from the
participant's personal account through ACH, through payroll deduction in agreement with the plan sponsor or
through the use of loan payment coupons with a quarterly payment schedule. Participants send their annuity
contract loan payments to a VALIC lockbox at Bank of America. Automated controls within the loan repayment
application require the payment amount to equal the amount allocated to the account. If the amounts do not
match or a loan does not exist, the systemwill not allow the payment to be allocated or the payment’s batch
to be processed
(3.8)
. The bank deposits checks that are in good order into the VALIC bank account. The bank
sends live checks that are not in good order to VALIC. Each check is logged into a spreadsheet and researched to
obtain information necessary to process payments.
Once resolved, Accounting Operations sets up deposit at the lockbox
(3.7)
. Automated controls within the loan
payment application prevent duplicate annuity lockbox transmittals and will not allow the transmittal of the
lockbox payment transactions to the record keeping system unless payments have been allocated, reviewed,
approved, and the bank deposit and lockbox amounts match
(3.10)
.
As annuity loan payments are made, the amount of escrow is reduced and the payment is applied to the fixed
account from which the loans were taken. Automated controls within the loan repayment application require
the payment amount to equal the amount allocated to the account. If the amounts do not match or a loan
does not exist, the system will not allow the payment to be allocated or the payment’s batch to be processed
(3.8)
. An error report is generated from the record keeping system for any payment that does not apply to a
loan. The exceptions are researched, corrected and processed upon resolution
(3.12)
.
III. Description of the VALIC Defined Contribution Plan Administration System