<PAGE>1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT 2
ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission file number 1-10557
POLICY MANAGEMENT SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
South Carolina 57-0723125
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One PMSC Center (P.O. Box Ten)
Blythewood, S.C. (Columbia, S.C.) 29016 (29202)
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803) 735-4000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, par value $.01 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
The aggregate market value of the voting stock held by non-affiliates of
the registrant was $828,522,784 at March 19, 1996 based on the closing market
price of the Common Stock on such date, as reported by the New York Stock
Exchange.
The total number of shares of the registrant's Common Stock, $.01 per
share par value, outstanding at March 19, 1996 was 19,489,871.
<PAGE>2
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for
the fiscal year ended December 31, 1995 as set forth in the pages attached
hereto:
List all such items, financial statements, exhibits or other portions amended.
(1) Item 14
(2) Form 11-K (401(k) Retirement Savings Plan)
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
(REGISTRANT) POLICY MANAGEMENT SYSTEMS CORPORATION
Date: July 1, 1996 By: Timothy V. Williams
Executive Vice President,
Chief Financial Officer
Part IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
Financial Statements and Schedules
See index to Consolidated Financial Statements and Supplementary Data on
page 29.
Exhibits Filed
Exhibits required to be filed with this Annual Report on Form 10-K are
listed in the following Exhibit Index. Certain of such exhibits which have
heretofore been filed with the Securities and Exchange Commission and which
are designated by reference to their exhibit numbers in prior filings are
hereby incorporated herein by reference and made a part thereof.
Pursuant to Rule 15d-21 promulgated under the Securities Exchange Act of
1934, the following annual report for the Company's 401 (k) Retirement Plan is
filed herewith:
Form 11-K for the Company's 401 (k) Retirement Savings Plan for the year
ended December 31, 1995 is incorporated herein by reference.
Form 8-K
The Company did not file any reports on Form 8-K during the last quarter
of the year ended December 31, 1995.
<PAGE>1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1995
POLICY MANAGEMENT SYSTEMS CORPORATION
401 (k) RETIREMENT SAVINGS PLAN
Issuer of securities held pursuant to the Plan is
POLICY MANAGEMENT SYSTEMS CORPORATION
One PMSC Center, Blythewood, South Carolina 29016
<PAGE>2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Policy
Management Systems Corporation 401(k) Retirement Savings Plan Committee has
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) Retirement Savings Plan
Date: July 1, 1996 By: Timothy V. Williams
Executive Vice President, Chief
Financial Officer
<PAGE>3
Financial Statements and Exhibits
Sequentially
Numbered
Pages
Financial Statements of the Plan together with and
Independent Public Accountants' Report for the years
then ended December 31, 1995 and 1994............... 6-19
Schedule I - Assets Held for Investment............. 21-22
Schedule II - Transactions or Series of Transactions
In Excess of 5% Of The Current Value Of Plan Assets. 23-24
Consent of Independent Public Accountants dated
June 26, 1996, annexed hereto...... ................. 25
<PAGE>1
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
for the years ended December 31, 1995 and 1994
With Report of Independent Accountants
<PAGE>
<PAGE>2
Policy Management Systems Corporation
401(k) Retirement Savings Plan
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
__________
Page
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan
Benefits, with Fund Information as of
December 31, 1995 and 1994 2-4
Statements of Changes in Net Assets Available for
Plan Benefits, with Fund Information for the
years ended December 31, 1995 and 1994 5-7
Notes to Financial Statements 8-14
Supplemental Schedules:
Form 5500, Item 27(a) - Schedule of Assets Held
for Investment Purposes, as of December 31, 1995 16-17
Form 5500, Item 27(d) - Schedule of Reportable
Transactions for the year ended December 31, 1995 18-19
<PAGE>
<PAGE>3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Administrative Committee of
Policy Management Systems Corporation
401(k) Retirement Savings Plan
We have audited the accompanying statements of net assets available for
plan benefits of the Policy Management Systems Corporation 401(k) Retirement
Savings Plan (the "Plan") as of December 31, 1995 and 1994, and the related
statements of changes in net assets available for plan benefits for the years
then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the Plan
at December 31, 1995 and 1994, and the changes in net assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for
the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The fund
information in the statement of net assets available for plan benefits and
the statement of changes in net assets available for plan benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for
plan benefits of each fund. The supplemental schedules and fund information
have been subjected to the auditing procedures applied in our audit of the
basic financial statements and, in our opinion, are fairly stated in all
material respects, in relation to the basic financial statements taken as a
whole.
Atlanta, Georgia
June 6, 1996
<PAGE>4
<TABLE>
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
as of December 31, 1995
<CAPTION>
U.S. Puritan Magellan PMSC
Loan Government Mutual Mutual Bond Stock
Fund Reserves Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at current value:
Short-term investments $ 14,447 $ 1,115 $ 1,508 $ $ 4,351
Mutual Funds 23,800,700 15,535,725 21,147,061
Common Stock 10,090,844
Total Investments 23,815,147 15,536,840 21,148,569 10,095,195
Receivables:
Loans receivable $2,338,035
Employer contributions
receivable 264,413
Other receivables 25,360
Total Receivables 2,338,035 25,360 264,413
Cash 95,763
Total Assets 2,338,035 23,936,270 15,536,840 21,148,569 10,359,608
LIABILITIES
Accounts payable 283,597
Other 658 627 4,006
Total Liabilities 283,597 658 627 0 4,006
Net assets available
for plan benefits $2,338,035 $23,652,673 $15,536,182 $21,147,942 $ $10,355,602
<FN>
Continued on next page
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>5
<TABLE>
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
as of December 31, 1995
(continued)
<CAPTION>
Fixed Smith Barney Smith Barney Smith Barney
Income Forfeiture Fundamental Int l Equities
Fund Account Account Account Fund Total
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at current value:
Short-term investments $ 91 $ 14,616 $ 97 $ 19 $ 14 $ 36,258
Mutual Funds 3,171,168 3,040,941 1,645,408 1,942,449 70,283,452
Common Stock 799 10,091,643
Total Investments 3,171,259 15,415 3,041,038 1,645,427 1,942,463 80,411,353
Receivables:
Loans receivable 2,338,035
Employer contributions
receivable 264,413
Other receivables 16,338 41,689
Total Receivables 16,338 2,644,146
Cash 33 187,616 1,106 8 284,526
Total Assets 3,171,292 15,415 3,228,654 1,662,871 1,942,471 83,340,025
LIABILITIES
Accounts payable 187,603 17,438 488,638
Other 5,840 11,131
Total Liabilities 5,840 187,603 17,438 499,769
Net assets available
for plan benefits $3,171,292 $ 9,575 $3,041,051 $1,645,433 $1,942,471 $82,840,256
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE>6
<TABLE>
POLICY MANAGEMENT SYSTEMS CORPORATION
401 (k) RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
as of December 31, 1994
<CAPTION>
U.S. Puritan Magellan PMSC Fixed
Loan Government Mutual Mutual Bond Stock Income Forfeiture
Fund Reserves Fund Fund Fund Fund Fund Account Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at
current value:
Short-term
investments $ 35 $ 3,817 $ 4,698 $ 89,199 $ 2,303 $ 29 $ 28 $ 100,109
Mutual Funds 6,558,005 8,097,191 10,626,976 1,752,286 27,034,458
Bonds 15,095 15,095
Common Stock 6,856,238 231,094 7,087,332
Total Investments 6,558,040 8,101,008 10,631,674 104,294 6,858,541 1,752,315 231,122 34,236,994
Receivables:
Transfers receivable (113,502) 42,034 (158,354) 47,747 182,075 0
Loans receivable $378,741 378,741
Employer
contributions
receivable 156,072 (156,072) 0
Other receivables 0
Total Receivables 378,741 42,570 42,034 (158,354) 47,747 182,075 (156,072) 378,741
Cash 329 298 3,705 7,605 13 36 44 12,030
Total Assets 378,741 6,600,939 8,143,340 10,477,025 111,899 6,906,301 1,934,426 75,094 34,627,765
LIABILITIES
Accounts payable 0
Accrued forfeitures 149,599 44,035 (193,634) 0
Other 3,300 3,300
Total Liabilities 149,599 3,300 44,035 (193,634) 3,300
Net assets available
for plan benefits $378,741 $6,451,340 $8,143,340 $10,473,725 $111,899 $6,862,266 $1,934,426 $ 268,728 $34,624,465
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>7
<TABLE>
POLICY MANAGEMENT SYSTEMS CORPORATION
401 (k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
for the year ended December 31, 1995
<CAPTION>
U.S. Puritan Magellan PMSC
Loan Government Mutual Mutual Bond Stock
Fund Reserves Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment Income:
Net appreciation (depreciation)
in market value $ 1,475,233 $ 3,320,061 $ 5,846 $ 701,536
Dividends and interest $ 1,042,659 733,059 1,203,777 (4,738) 5,661
1,042,659 2,208,292 4,523,838 1,108 707,197
Cash Contributions:
Employer 1,566,673 2,009,437
Employee 1,965,235 1,725,860 2,381,734 56,086
3,531,908 1,725,860 2,381,734 2,065,523
Transfers $ (35,283) (10,848,148) 2,579,281 3,488,199 (92,066) 1,871,559
Net assets received from
other benefit plans 27,708,300 2,598,711 2,925,355 79,123
Loan repayments (256,026) 83,639 84,295 108,725 8,772
Other additions 60,936 64,840
Total Additions (291,309) 21,579,294 9,196,439 13,427,851 (90,958) 4,797,014
Deductions (Additions) from net
assets attributed to:
Distributions 80,663 3,207,829 1,376,964 1,940,279 20,941 889,268
Forfeitures 34,202 1,942 2,311 149,506
Loan disbursements (2,321,346) 907,430 397,107 579,779 238,638
Other deductions (9,920) 228,500 27,584 231,265 26,266
Total Deductions (2,250,603) 4,377,961 1,803,597 2,753,634 20,941 1,303,678
Net increases (decreases) 1,959,294 17,201,333 7,392,842 10,674,217 (111,899) 3,493,336
Net assets available for plan benefits
Beginning of year 378,741 6,451,340 8,143,340 10,473,725 111,899 6,862,266
End of year $2,338,035 $23,652,673 $15,536,182 $21,147,942 $ 0 $10,355,602
Continued on next page
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>8
<TABLE>
POLICY MANAGEMENT SYSTEMS CORPORATION
401 (k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
for the year ended December 31, 1995
(continued)
<CAPTION>
Fixed Smith Barney Smith Barney Smith Barney
Income Forfeiture Fundamental Int l Equities
Fund Account Account Account Fund Total
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment Income:
Net appreciation (depreciation)
in market value $ 141,617 $ (4,704) $ 16,782 $ (9,308) $ 216,046 $ 5,863,109
Dividends and interest 172,835 5,153 187,796 16,975 44,854 3,408,031
314,452 449 204,578 7,667 260,900 9,271,140
Cash Contributions:
Employer 3,576,110
Employee 424,197 59,807 33,636 39,161 6,685,716
424,197 59,807 33,636 39,161 10,261,826
Transfers (95,072) 116,926 1,073,411 885,850 1,055,343 0
Net assets received from
other benefit plans 950,615 1,794,758 743,836 638,378 37,439,076
Loan repayments 19,601 3,784 2,351 2,324 57,465
Other additions 125,776
Total Additions 1,613,793 117,375 3,136,338 1,673,340 1,996,106 57,155,283
Deductions (Additions) from net
assets attributed to:
Distributions 280,161 5,875 36,975 2,763 23,279 7,864,997
Forfeitures 668 (188,629) 0
Loan disbursements 89,969 55,370 23,889 29,164 0
Other deductions 6,129 559,281 2,942 1,255 1,192 1,074,494
Total Deductions 376,927 376,527 95,287 27,907 53,635 8,939,491
Net increases (decreases) 1,236,866 (259,152) 3,041,051 1,645,433 1,942,471 48,215,792
Net assets available for plan benefits
Beginning of year 1,934,426 268,727 0 0 0 34,624,464
End of year $3,171,292 $ 9,575 $3,041,051 $ 1,645,433 $1,942,471 $82,840,256
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>9
<TABLE>
POLICY MANAGEMENT SYSTEMS CORPORATION
401 (k) RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
for the year ended December 31, 1994
<CAPTION>
U.S. Puritan Magellan PMSC Fixed
Loan Government Mutual Mutual Bond Stock Income Forfeiture
Fund Reserves Fund Fund Fund Fund Fund Account Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment Income:
Net appreciation
(depreciation)
in market value $ (516,798) $ (599,152) $ 817 $1,982,283 $ (156,578) $ 9,682 $ 720,254
Dividends and interest $ 230,678 635,324 403,672 2,573 1,826 120,466 728 1,395,267
230,678 118,526 (195,480) 3,390 1,984,109 (36,112) 10,410 2,115,521
Cash Contributions:
Employer 2,130,232 43,508 54,721 (123,315) 9,889 2,115,035
Employee 1,580,925 1,553,550 2,100,148 89,810 383,444 5,707,877
3,711,157 1,597,058 2,154,869 (33,505) 393,333 7,822,912
Transfers $ (20,299) (829,054) 644,508 818,934 (639,920) 11,614 14,217 0
Net assets received from
Cybersaver 401(K) Plan 1,906,898 1,553,434 1,830,832 238,127 704,406 6,233,697
Loan repayments (52,142) 26,466 24,105 32,892 1,594 5,403 38,318
Other additions 12,477 11,724 2,438 2,570 4,375 3,441 332 167,127 204,484
Total Additions (59,964) 5,057,869 3,940,069 4,644,617 7,765 1,553,846 1,078,976 191,754 16,414,932
Deductions (Additions) from net
assets attributed to:
Distributions 48,177 2,242,048 1,065,656 1,316,671 20,021 844,010 124,932 5,661,515
Forfeitures 191,344 3,152 5,028 148,433 1,322 (349,279) 0
Loan disbursements (208,415) 47,875 70,990 63,450 12,927 13,173 0
Other deductions 3,230 7,371 13,603 161,654 4,726 12,835 2,417 375,404 581,240
Total Deductions (157,008) 2,488,638 1,153,401 1,546,803 24,747 1,018,205 141,844 26,125 6,242,755
Net increases (decreases) 97,044 2,569,231 2,786,668 3,097,814 (16,982) 535,641 937,132 165,629 10,172,177
Net assets available for plan benefits
Beginning of year 281,697 3,882,109 5,356,672 7,375,911 128,881 6,326,625 997,294 103,099 24,452,288
End of year $ 378,741 $6,451,340 $8,143,340 $10,473,725 $111,899 $6,862,266 $1,934,426 $268,728 $34,624,465
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>10
1. ESTABLISHMENT OF PLAN
The Board of Directors of Policy Management Systems Corporation (the
"Company") established the Policy Management Systems Corporation 401(k)
Retirement Savings Plan (formerly the Policy Management Systems
Corporation 401(k) Retirement Plan) (the "Plan") to provide a before-tax
savings retirement program for all eligible employees of the Company. The
Plan, which became effective on April 1, 1990, replaced the retirement
plan portion of the Stock Purchase Savings Program for Employees of Policy
Management Systems Corporation. Effective January 1, 1994, the retirement
plan of Cybertek Corporation, a wholly-owned subsidiary of the Company,
was merged into the Plan and all assets available to Participants were
transferred into the Plan. Effective January 1, 1995, the PMS, Inc. Profit
- Sharing/401(k) Savings Plan was merged into the Plan and all assets
available to Participants were transferred into the Plan. Effective July
1, 1995 the Policy Management Systems Corporation Profit Sharing Plan and
Trust was merged into the Plan and all assets available to Participants
were transferred into the Plan. The Plan is subject to the requirements
of the Employee Retirement Income Security Act of 1974 (ERISA).
2. PLAN DESCRIPTION
General
The following description of the Plan is provided for general information
purposes only. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
Eligibility
All employees of the Company and its participating affiliates, who are U.S
citizens or U.S. residents, who have attained the age of 18, and who have
completed any six-consecutive-month period of employment are eligible to
participate in the Plan. A Participant who chooses not to enroll in the
Plan when they are first eligible may elect to participate at a later
date, in accordance with the terms of the Plan.
Employee Contributions
Prior to January 1, 1995, Participants could make contributions through
payroll deductions, in 2% increments, of up to 6% of their eligible
earnings on either a before-tax basis or an after-tax basis ( Basic Before-
Tax and Basic After-Tax Contributions ), or a combination of both.
Participants could also elect to make Additional Before-Tax or Additional
After-Tax Contributions of 2% or 4% of their eligible earnings. Additional
Contributions were not eligible for Employer Matching Contributions. The
<PAGE>11
Participant s combined Basic and Additional Before-Tax and After-Tax
Contributions could not exceed 10% of a Participant s eligible earnings.
Effective January 1, 1995, Participants may contribute in 1% increments
up to 6% of eligible compensation as either Before-Tax or Basic After-Tax
Contributions to the Plan, and may contribute an additional 9% of eligible
compensation as either Additional Before-Tax or Additional After-Tax
Contributions to the Plan, not to exceed a total aggregate annual
Contribution to the Plan of greater than 15% of eligible compensation. The
maximum Before-Tax Contribution allowed by the Internal Revenue Code of
1986 as amended (the Code ), for 1995 was $9,240.
Employer Matching Contributions
Prior to January 1, 1995, as of the end of each calendar month, the
Company contributed a matching amount equal to 50% of a Participant's
first 6% of Basic Before-Tax Contributions or Basic After-Tax
Contributions, but not both. The Company did not match any Additional
Before-Tax Contributions or any Additional After-Tax Contributions. The
Employer Matching Contribution was allocated to the Participant's account
as of December 31 each year only if the Participant was actively employed
on December 31 and worked 1,000 or more hours during the Plan Year. Prior
to October 1993, the Employer Matching Contributions were invested by the
Trustee in Policy Management Systems Corporation common stock. By
directive of the Administrative Committee of the Plan, Employer Matching
Contributions made after October 1993 were invested in the Fidelity
Retirement Government Money Market Trust.
Effective January 1, 1995, the Company began matching 100% of the first 3%
and 50% of the next 3% of the Participant s Basic Before-Tax or Basic
After-Tax Contributions, but not both. Also, effective July 1, 1995,
Employer Matching Contributions are invested in Policy Management Systems
Corporation common stock.
Allocations
Participant s accounts are credited with the actual income derived from
the investments in such accounts and with the actual expenses related to
such accounts.
<PAGE>12
<PAGE>
Investment Elections
Each Participant is required to submit an election form to the Plan
Administrator designating the allocation of the Participant s
contributions among the Plan s investment funds in multiples of 5%. In
addition, Participants may change the investment of contributions and may
move their vested balances among investment funds at specified intervals
during the year.
In addition to the contributions specified above, Participants who receive
a qualified distribution under section 401(a) of the Code, from any other
tax qualified plan, may have all or part of such distribution transferred
into the Plan. Such rollover contributions are subject to tax regulations
imposed by the Code.
Effective January 1, 1995, the Series EE Bond Fund was closed for
investment. The assets have been allocated among the Plan's other
investment funds in accordance with the respective participant elections.
Also, effective July 1, 1995, the Smith Barney funds were added as
investment electives of the Plan.
Vesting
A Participant is always 100% vested in his or her Before-Tax Contribution
Accounts, After-Tax Contribution Accounts and Rollover Account. A
Participant will generally become fully vested in his or her Employer
Matching Contribution Account when the first of the following occurs: the
Participant obtains five years of Credited Service; the Participant
reaches his or her Normal Retirement Date; the Participant becomes
Permanently Disabled; or on the date of the Participant s death.
Forfeiture Allocations
All Participant forfeitures are used to reduce future Employer Matching
Contributions to the Plan.
Benefit Payments
The Participant s After-Tax Contributions may be withdrawn at any time
upon written request of the Participant. In addition, a Participant may
withdraw all or any part of his or her vested Employer Contributions
transferred to the Plan from the Stock Purchase Savings Program and the
vested Employer Matching Contributions on his or her Basic After-Tax
Contributions, but only to the extent that such contributions have been in
the Plan or the Stock Purchase Savings Program for at least two full Plan
Years after the Plan Year in which such contributions were made.
<PAGE>13
Loans
Participants may apply for loans greater than $1,000 from the Plan,
collateralized by their account balances and repaid through payroll
deduction generally subject to the following terms:
1) The total loans of any Participant at any point in time shall not
exceed the lesser of (I) 50% of the Participant s vested Account
balance, (ii) the total amount held in the Participant s
Contribution and Rollover accounts, or (iii) $50,000 adjusted on the
volume of loan outstanding to the Participant during the previous
one-year period.
2) Loans may not be made in such a manner as to favor Highly
Compensated Employees, Officers or Shareholders.
3) No Participant shall be permitted to have more than one loan from
the Plan issued and outstanding at any time, and no Participant
shall be issued a new loan within six months of repayment of a Plan
loan.
4) Interest charged on loans is determined by the Committee at a rate
commensurate with interest rates charged for similar loans under
general market conditions.
5) The length and terms of repayment may not exceed 5 years, unless the
purpose of the loan is for the purchase of the Participant s
principal residence, in which case the loan term may be extended by
the Committee.
6) All amounts repaid are credited to the Participant s account.
Administrative Expenses
Administrative expenses of the Plan may be paid out of Plan assets if not
paid by the Company. Administrative expenses paid by the Plan for the
years ended December 31, 1995 and 1994 were $720,911 and $277,303,
respectively.
<PAGE>14<PAGE>
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements have been prepared on the accrual
basis in accordance with generally accepted accounting principles. The
preparation of financial statements in conformity with generally accepted
accounting principles may require management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements, as well as the reported amounts of additions to and
deductions from net assets available for plan benefits during the
reporting period. Actual results could differ from those estimates.
Accounting for Benefit Distributions
In accordance with guidance issued by the American Institute of Certified
Public Accountants in 1993, the Plan accounts for distributions such that
all amounts elected to be withdrawn and distributed from the Plan by
Participants are not recorded as a liability in the Statement of Net
Assets Available for Plan Benefits. As of December 31, 1995 and 1994,
$815,161 and $748,643 have been allocated to accounts of persons who have
withdrawn from participation in the earnings and operations of the Plan,
but for which disbursement of those funds from the Plan has not yet been
made. The following is a reconciliation to the amounts reported on Form
5500:
Net assets available for plan 1995 1994
benefits as stated in the
financial statements $82,840,256 $34,624,465
Less: Distributions payable (815,161) (748,643)
Net assets available for plan
benefits per Form 5500 $82,025,095 $33,875,822
In addition, the report differs from the Form 5500 by the same amount for
distributions on the Statement of Changes in Net Assets.
Investments
The Plan invests in open-ended funds managed by either Fidelity
Investments, First Union National Bank or Smith Barney with the exception
of the PMSC Stock Fund and Forfeiture Fund. Each fund is valued at quoted
market prices to determine a current fund value. Investments in securities
for which exchange quotations are readily available are valued at the last
<PAGE>15
sale price, or, if no sale, at the closing bid price. Debt securities are
valued in the same manner or in some other manner, if, in the opinion of the
Board of Trustees, such other manner would more accurately reflect the fair
value of such debt securities. Short-term investments (consisting primarily
of money-market funds) are valued either at amortized cost or original cost
plus accrued interest, both of which approximate market value.
The realizable value of the Plan's investment options are subject to
fluctuations in market conditions such that the value of the Plan's
investments may significantly increase or decrease during a given period
and result in a realizable value greater or less than the value at which
such investments were purchased, resulting in unrealized or realized gains
or losses.
The Plan presents in the statement of changes in net assets available for
plan benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
4. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated January 26, 1996, that the Plan is designed in accordance
with Sections 401(k) and 401(a) of the Code. The Plan administrator
believes that the Plan is designed and is currently being operated in
compliance with the applicable requirements of the Code.
5. TERMINATION OF PLAN
The Company expects and intends to continue the Plan in force
indefinitely, but has reserved the right to amend or terminate the Plan as
necessary. If the Plan were to be terminated, Participants would become
fully vested and all assets of the Plan would be distributed to the
individual Participants based upon the vested balances in their individual
accounts the at date of termination.
<PAGE>16<PAGE>
6. INVESTMENTS
The Plan s investments are held in a bank administered trust fund. The
following table presents investments. Investments that represent 5% or
more of the Plan s net assets have been separately identified.
December 31,
1995 1994
Investments at fair value measured by quoted
market price:
Fidelity Magellan Fund $21,147,061 $10,626,976
Fidelity Puritan Fund 15,535,725 8,097,191
Fidelity Retirement Government
Money Market Trust 23,800,700 6,558,005
First Union Fixed Income
Portfolio Trust 3,171,168 1,752,286
Smith Barney Fundamental Value 3,040,941 -
Smith Barney Special Equities 1,942,449 -
Smith Barney International Fund 1,645,408 -
Policy Management Systems Corporation
Common Stock (211,898 and 168,746
shares at December 31, 1995 and
1994, respectively)* 10,091,643 7,087,332
Investments measured by estimated fair value:
All others 2,374,293 493,945
Total Plan investments $82,749,388 $34,615,735
* indicates securities of a related party (plan sponsor)
7. RELATED PARTY TRANSACTIONS
The Plan purchases, on behalf of Participants, shares of the Company s
common stock in accordance with individual Participant s investment
elections. During the Plan year ended December 31, 1995, the Plan
purchased 105,948 shares at an aggregate cost of $5,200,287 and sold
48,025 shares for aggregate proceeds of $2,196,222 and realized gains of
$65,081. During the Plan year ended December 31, 1994, the Plan purchased
1,488 shares at an aggregate cost of $63,716 and sold 22,702 shares for
aggregate proceeds of $794,173 and realized gains of $64,122.
<PAGE>17
<PAGE>18
SUPPLEMENTAL SCHEDULES
<PAGE>
<PAGE>19
<TABLE>
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
FORM 5500, ITEM 27(a)-SCHEDULE OF ASSETS HELD
FOR INVESTMENT PURPOSES
December 31, 1995
<CAPTION>
Current
Identity of Issue Description of Investment Cost Value
<S> <C> <C> <C>
Fidelity 23,800,700 units Fidelity
Retirement Government Money Market Trust
Money Market Portfolio $23,800,700 $23,800,700
Reserves
14,447 units Valiant General
Fund #62 14,447 14,447
Fidelity 913,329 units Fidelity Puritan
Puritan Fund Fund, Inc. 14,252,117 15,535,725
1,115 units Valiant General
Fund #62 1,115 1,115
Fidelity 245,953 units Fidelity Magellan
Magellan Fund Fund, inc. 18,191,372 21,147,061
1,508 units Valiant General
Fund #62 1,508 1,508
PMSC 211,881 shares Policy Management
Stock Fund Systems Corporation Common Stock * 9,471,296 10,090,844
4,351 units Valiant General
Fund #62 4,351 4,351
Fixed Income 311,816 units First Union
Account Fixed Income Portfolio Trust 3,158,885 3,171,168
91 units Valiant General
Fund #62 91 91
Forfeiture 14,616 units Valiant General
Account Fund #62 14,616 14,616
17 shares Policy Management Systems
Corporation Common Stock * 812 799
Loan 2,338,035 units participant loans
Fund bearing interest rates from 7.00%
to 12.25% with varying maturities
from 18 to 360 months 2,338,035 2,338,035
Smith Barney 96,335 units Smith Barney
Int l Account International Equity Fund 1,654,900 1,645,408
19 units Valiant General
Fund #62 19 19
<FN>
continued on next page
<PAGE>20
<PAGE>
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
FORM 5500, ITEM 27(a)-SCHEDULE OF ASSETS HELD
FOR INVESTMENT PURPOSES
December 31, 1995
(continued)
<CAPTION>
Current
Identity of Issue Description of Investment Cost Value
<S> <C> <C> <C>
Smith Barney 63,833 units Smith Barney Special
Equities Account Equities Fund 1,732,205 1,942,449
14 units Valiant General
Fund #62 14 14
Smith Barney 362,017 units Smith Barney
Fundamental Value Acct. Fundamental Value Fund 3,027,436 3,040,941
97 units Valiant General
Fund #62 97 97
<FN>
* Indicates party-in-interest to the Plan.
Note: The Valiant General Fund #62 represents funds held in a money market account for the purpose
of paying disbursements related to the purchasing and selling of investments.
<PAGE>21<PAGE>
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
FORM 5500, ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
Value of
Identity of Asset on
Party Description of Number of Selling Cost of Transaction Net Gain
Involved Assets Transactions Price Asset Date (Loss)
Single Transactions Exceeding 5% of Net Assets
<S> <C> <C> <C> <C> <C> <C>
Fidelity
Retirement Gov't
Money Market
Portfolio Fund Shares 1 $ $25,996,569 $25,996,569 $
Fidelity
Retirement Gov t
Money Market
Portfolio Fund Shares 2 4,976,630 4,976,630 4,976,630 0
Fidelity
Puritan
Fund Fund Shares 1 2,303,591 2,303,591
Fidelity
Magellan
Fund Fund Shares 1 2,637,975 2,637,975
Smith Barney
Fundamental
Fund Fund Shares 1 1,745,871 1,745,871
Series of Transactions Exceeding 5% of Net Assets (Exclusive of the Above Transactions)
Fidelity
Retirement Gov't Money Market
Money Market Account
Portfolio Shares 42 5,296,818 5,296,818
Fidelity
Retirement Gov't Money Market
Money Market Account
Portfolio Shares 38 9,129,862 9,129,862 9,129,862 0
First Union Fixed
Income Portfolio Mutual Fund
Trust Shares 28 1,380,800 1,380,800
First Union Fixed
Income Portfolio Mutual Fund
Trust Shares 15 394,700 416,100 392,139 (21,400)
Fidelity Puritan Mutual Fund
Fund Shares 44 3,551,888 3,551,888
Fidelity Puritan Mutual Fund
Fund Shares 28 1,296,679 1,206,895 1,294,221 89,784
Fidelity Magellan Mutual Fund
Fund Shares 43 8,023,017 8,023,017
Fidelity Magellan Mutual Fund
Fund Shares 25 1,853,892 1,525,529 1,821,418 328,363
Smith Barney Mutual Fund
Fundamental Fund Shares 8 345,303 345,303
<FN>
continued on next page
<PAGE>
<PAGE>22
POLICY MANAGEMENT SYSTEMS CORPORATION
401(k) RETIREMENT SAVINGS PLAN
FORM 5500, ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(Continued)
<CAPTION>
Value of
Identity of Asset on
Party Description of Number of Selling Cost of Transaction Net Gain/
Involved Assets Transactions Price Asset Date (Loss)
<S> <C> <C> <C> <C> <C> <C>
Smith Barney Mutual Fund
Fundamental Fund Shares 9 72,741 69,469 71,897 3,272
PMSC Stock PMSC Common
Fund Stock 21 5,185,452 5,200,289
PMSC Stock PMSC Common
Stock 26 2,196,222 2,177,373 2,223,756 18,849
Money Market
Valiant General Account
Fund #62 Shares * 32,705,783 32,705,783
Money Market
Valiant General Account
Fund #62 Shares * 32,769,634 32,769,634 32,769,634 0
<FN>
*Omitted from schedule by Trustee.
</TABLE>
<PAGE>1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Policy Management Systems Corporation on Form S-8 (File No. 33-59555) of our
report dated June 26, 1996, on our audits of the financial statements of the
Policy Management Systems Corporation 401(k) Retirement Savings Plan as of
December 31, 1995 and 1994, and for the years then ended, which report is
included in this Annual Report on Form 11-K.
Coopers & Lybrand L.L.P.
Atlanta, Georgia
June 26, 1996
