Setting Up Base Benefits Core Tables

This chapter provides an overview of the Manage Base Benefits business process core tables and explains how to:

• Set up benefit providers.

• Set up dependent relationships.

• Set up coverage codes.

• Set up coverage group codes.

• Set up FEGLI codes.

• Set up the service step table.

• Set up benefit rates.

• Set up annual benefits base rates (ABBRs).

• Set up calculation rules.

• Set up deduction codes.

• Set up special accumulators.

• Set up limits for qualified savings plans.

• Set up earning for leave and vacation buy/sell plans.

• Set up benefits certification.

Understanding Base Benefits Core Tables

Before you can begin building your benefit programs and entering your benefit plan information, there are some core tables that must be set up first. This chapter covers setting up those core tables.

Setting Up Benefit Providers

A benefit provider is a vendor. A benefit provider is the entity that sponsors the benefit plan that your company offers your employees. For example, if your company offers a Blue Cross/Blue Shield health insurance plan, Blue Cross/Blue Shield is the provider. If your organization has a self-funded medical plan but uses a third-party administrator (TPA) to handle administrative functions such as eligibility and claims, the TPA can be considered a vendor.

You use the Provider/Vendor Table component (PROVIDER_TABLE) to set up an ID for each vendor.

In order to include a benefit provider in the HIPAA (Health Insurance Portability and Accountability Act) EDI File Creation process, you must specify the vendor's Federal Employer Identification Number (FEIN).

Warning! If your organization uses PeopleSoft Enterprise Payroll for North America or PeopleSoft Enterprise Payroll Interface to pay a benefit vendor, add the vendor using the Payables Vendor Table, not the Base Benefits Provider/Vendor Table.

See Also

Setting Up Vendors

Setting Up eBenefits

Setting Up Dependent Relationships

Use the Dependent Relationships Table (DEPBEN_TYPE_TBL) component to define dependent relationships.

This section provides an overview of dependent relationships and discusses how to define dependent relationships.

See Setting Up eBenefits.

Note. Beneficiary relationships are not tracked because they do not have the same legal ramifications as dependents.

Understanding Dependent Relationships

You define the relationships—for example, child, grandparent (grandmother or grandfather), nephew, or niece (other relative) — that qualify as dependents according to your organization’s rules. You cannot enroll dependents in benefits if their relationships are not defined. For example, if you had not defined child as an allowable dependent type, you couldn’t enter an employee’s son as a dependent. The characteristics that you apply to the relationship will be used later by the system to validate the relationship.

Page Used to Set Up Dependent Relationships

Defining Dependent Relationships

Access the Dep. Relationship page.

Relationship to Employee	The system displays the relationship that you selected to access the page.
Effective date	Enter the date on which the dependent relationship goes into effect.
Status	Select whether the dependent relationship is Active or Inactive. If the status is Inactive, the relationship is no longer considered a valid dependent relationship.
Covered Person Type	Select the covered person type you are using to define the relationship. The delivered values are: Employee Spouse Child (child, grandchild, domestic partner child, other child, step child, foster child) Other Qualified Dependent Domestic Partner Non-qualified Dependent ExSpouse
Age Limit Flag	When the COBRA process for over-aged dependents runs, the system uses this flag to indicate which dependent roles should have the over-age rules applied.
Certificate ID	Select to define a certification form for a relationship. The certificate ID defined here will appear in the eBenefits Self-Service application.
Mutually Exclusive	Select to limit participant to one dependent with a relationship that has been flagged as mutually exclusive at one time. If the participant tries to save more than one mutually exclusive dependents in eBenefits, the system allows it but makes the dependent a beneficiary. An informational message appears to the employee.
Gender Validation	Options include: No Gender Validation: Select and no gender validation occurs. Opposite Sex Only: Select to ensure that when a dependent is added or a relationship changes, that person is the opposite sex from the participant. Same Sex Only: Select to ensure that when a dependent is added or a relationship changes, that person is the same gender as the participant.

Note. Certificate ID and Gender Validation can effect Benefits Certification.

See Also

Setting Up Benefits Certification

Setting Up Coverage Codes

To set up the coverage code that define who can be covered by a benefit, use the Health Coverage Codes (COVERAGE_CODES) component.

This section provides an overview of coverage codes and discusses how to define coverage codes.

Understanding Coverage Codes

You define and manage coverage codes for your benefit programs with the Coverage Code table. You will attach these coverage codes to your benefit plan options on the Benefit Program table.

PeopleSoft delivers nine basic coverage codes for which you define a minimum and maximum allowable for each eligible covered person type. These delivered coverage codes are described in this table:

You can also define coverage codes to validate enrollments against a total number of eligible covered person types, for example, a coverage code that allows enrollment of the employee plus one dependent. The dependent can be either a spouse or a child. The system will sum the allowable covered person types defined for the coverage code rather than look at the minimum and maximum defined for each individual covered person type.

Page Used to Set Up Coverage Codes

Defining Coverage Codes

Access the Coverage Code Tbl page.

COBRA Coverage Set	This is a two character code that is used to group coverage codes together for COBRA eligibility purposes. When an individual experiences a COBRA event, the system must adjust the range of coverage codes available to each qualified beneficiary. By restricting itself to a specific set of coverage codes, COBRA processing is able to more accurately determine which benefit options to present to a participant who is eligible for COBRA coverage. If COBRA coverage sets are not established, then COBRA processing may encounter multiple equivalent coverage codes, and eligibility determination may fail.
Total Covered Persons	Select this check box to activate the total covered person types functionality for this coverage code.
Total Minimum Covered andTotal Maximum Covered	These fields are only visible when the Total Covered Persons check box is selected. Enter the allowable minimum and maximum covered persons. Include the employee in this count.

Allowable Covered Person Types

Setting Up Coverage Group Codes

To set up coverage group codes, use the Life and AD/D Coverage Groups (COVERAGE_GROUP_TBL) component.

This section provides an overview of coverage group codes and discusses how to enter group coverage code information.

Understanding Coverage Group Codes

Life insurance and accidental death and dismemberment (AD/D) plans use coverage group codes to establish the maximum lifetime coverage allowed.

For example, if you define a coverage group code with a 500,000 USD maximum, then enter that coverage group code for a supplemental life plan and a group life plan, and associate both benefit plans with a benefit program. If you were to enroll an employee in both of those plans, the system would ensure that the employee's total coverage by both plans does not exceed 500,000 USD.

If the total coverage for a participant exceeds the coverage maximum, the system will reduce the total coverage to meet the coverage maximum. As the system processes the deduction, it accumulates the coverage amounts and will begin reducing coverage when the coverage group maximum is reached. The system processes plans in order of deduction priority, and if more than one plan has the same priority, it processes in increasing plan type order.

Note. Payroll uses the effective date to determine which coverage maximum to use for a particular processing cycle, according to the pay period end date.

Page Used to Set Up Coverage Group Codes

Entering Coverage Group Code Information

Access the Coverage Group Tbl page.

Effective Date	Enter the effective date for the coverage maximum. Payroll uses the effective date to determine which coverage maximum to use for a particular processing cycle, according to the pay period end date.
Coverage Maximum	Enter the maximum total life and AD/D coverage. This amount applies to all the life and AD/D benefit plans that you associate with the coverage group code and that you associate with one benefit program. You connect a life or AD/D plan with a coverage group code using the Life and AD/D Plan Table.

Setting Up FEGLI Codes

To set up Federal Employee Group Life Insurance (FEGLI) codes use the FEGLI Code Table (GVT_FEGLI_TBL) component.

This section discuss how to enter FEGLI codes.

Page Used to Set Up FEGLI Codes

Entering FEGLI Code Information

Access the FEGLI Code Table page.

Setting Up the Service Step Table

To set up the service step table, use the Service Step Table (SERVICE_STEP_TABLE) component.

This section provides an overview of the service step table and discusses how to enter service step information.

Understanding the Service Step Table

When you set up savings plans you can define your organization's employer match according to the employee's years of service. The Service Step Table defines the different intervals, tax classification, and the amount of match.

You can also define deduction classifications based on either a percentage of the employee’s gross salary or a percentage of the employee’s contribution amount.

Page Used to Set Up the Service Step Table

Entering Service Step Table Information

Access the Service Step Table page.

After Months of Service	Enter the number of months the employee must be employed to receive the employer match.
Deduction Class	Enter the tax classification for this match.
Up to % of Employee's Earnings (up to percent of employee's earnings)	Enter the maximum amount of the employer match contribution percentage.
% of Employee Investment (percent of employee investment)	Enter the percentage amount of the employee contribution that the employer will match.

Example of Before- and After-Tax Matching

Let's say you have a 401(k) plan that's set up to match:

• 50% for the first 3% of the employee's salary for before-tax contributions.

• 100% up to 6% of the employee's salary for before-tax contributions.

• 25% on the first 2%, 50% up to 4%, and 100% up to 6% on the employee's after-tax contributions.

Here's how you set this up:

Example of After Months of Service Rewards

This example shows how to use the After Months of Service field to create multiple service steps to reward employees for staying with the company.

Setting Up Benefit Rates

To set up benefit rates, use the Benefit Rate Type (BN_RATE_TYPE) and Benefit Rates (BN_RATE_TABLE), components.

This section provides overview of benefit rates and percent of gross limits, and discusses how to:

• Enter benefit rate information.

• Define percent of gross limit.

Understanding Benefit Rates

Benefit rates are used by Plan Types AX (Simple Benefits), 1X (Health Benefits), 2X (Life and Accidental Death), and 3X (Disability). The Benefit Rate Table defines rates in terms of flat amounts, percentages of compensation base, or rates per-unit-of-coverage. It also defines the criteria used to select an individual rate from the table, such as age, gender, coverage code, benefit plan, or compensation range. The structure of a set of benefit rates (the rate terms and the selection criteria) is itself defined in the Benefit Rate Type page, while the actual rate data is entered in the Benefit Rate Table page. Benefit Rate Types allow you to mix and match criteria and rate terms to create Benefit Rate Tables that best fit your business needs.

Understanding Benefit Rates

Some states set a limit on the amount an employee pays for certain benefits, especially health insurance. This limit is based on a percentage of the employee’s gross pay, and the percentage itself is defined on the Calculation Rules Table. However, this limit only applies to the portion of a benefit cost that represents coverage for the employee – the cost to cover a spouse or other family members is not subject to the limit. In general, the benefits rates do not break out costs per person. Therefore, the Benefit Rate Table has a special entry area for defining what portion of the overall employee rate is subject to this optional limit.

If the percent-of-gross limit is, in fact, defined, then the system applies this limit by calculating benefit costs as follows:

Lesser of [(EE Premium Amount Subject to Limit) or (Gross Pay × Limit %)] plus (Total EE Premium Amount − EE Premium Amount Subject to Limit)

Suppose that a monthly-paid employee is enrolled in family medical coverage, which has a flat rate of 300 USD per month. The amount of the employee’s portion is 125 USD. The following example shows how to apply a 1.0% of gross pay limit to the employee-only coverage:

Total EE Premium Amount = 300 USD

EE Premium Amount Subject to Limit = 125 USD

Limit = 1.0% of Gross Pay

Gross Pay = 10,000 USD

The deduction is calculated as:

[Lesser of (125 or (10,000 × .01))] + (300 − 125)

= [Lesser of (125 or 100)] + (175)

= (100) + (175)

= 275 USD

The amount of the employee premium in excess of the limited deduction is 25 USD (300 - 275). This excess amount is added to the employer-paid premium.

Here’s another example. Instead of the employee’s single-coverage portion of the premium being a flat amount of 125 USD, let’s define this as 30% of the premium amount:

Total EE Premium Amount = 300 USD

EE Premium Amount Subject to Limit = 30%

Limit = 1.0% of Gross Pay

Gross Pay = 10,000 USD

The deduction is calculated as:

[Lesser of (300 × 30%) or (10,000 × .01))] + (300 − 125)

= [Lesser of (90 or 100)] + (175)

= (90) + (175)

= 265 USD

In this case, 35 USD (300 - 265) is added to the employer-paid premium.

You can define limits on the employee’s portion of a benefit premium by specifying a percent of gross limit on the Calculation Rules Table.

For example, current legislation in Hawaii requires that employers charge no more than 1.5% of an employee’s gross wages for medical coverage. Only the employee’s personal coverage is subject to this limit.

If the rate table indicates the employer pays part of the premium, then any premium in excess of this final employee deduction amount (in this case, 1.5% of gross wages) is redirected (added) to the employer-paid portion of the premium. If the employer does not pay part of the premium, then no redirection takes place.

Pages Used to Define Benefit Rates

Defining Benefit Rate Types

Access the Benefit Rate Types page.

Rate or Percent	Select Rate if you are specifying either flat amounts or rates per-unit-of-coverage, or Percent if the rate is calculated as a percentage of compensation
Uses Compensation	This field is automatically selected if either the Rate Type is set to Percent, or if any of the key fields that are used will use the Employee's compensation data to determine the rate.
Uses Demographics	This field is automatically selected if any of the key fields that are used will use demographic data to determine the rate.

Rate Keys

Delivered Benefit Rate Types

Benefit Rate Types delivered with your system are:

• Age–Graded. (By Gender, Smoker): Define rates, flat amounts or per unit of coverage, for the insured based on gender and smoker status within specific age brackets.

• Flat Rate: Define rates that are based on a specific dollar amount.

• Percent of Base: Defines rates as simple fixed percentages of an employee’s compensation base.

• Length of Service (Months): Defines rates (flat amounts or per unit of coverage) based on length-of-service brackets.

• Compensation Bands: Defines rates (flat amounts or per unit of coverage) based on compensation brackets.

• Covered Person Type : Defines rates (flat amounts or per unit of coverage) individually for each covered person type. This rate type is only applicable to Health plans, since they are the only plan type that supports coverage codes.

  This rate type allows qualified and non-qualified persons to be assigned to different rates, and results in a rate being calculated per covered person on the actual enrollment.

• Benefit Plan and Coverage Code: Defines rates, flat amounts or per unit of coverage, based on the benefit plan and coverage code enrollment. This rate type is useful for consolidating all rates for a given health provider into a single table.

Entering Benefit Rate Information

Access the Benefit Rate Table page.

Warning! PeopleSoft delivers a set of rates with an ID of IRS. PeopleSoft Enterprise Payroll for North America uses these IRS rates to calculate imputed income. The IRS table ID set should not be changed.

Benefit Rate Table

Use the Benefit Rate Table group box to define the structure of the rate table.

Rate Data

Use this group box to enter either Composite Rates or Detail Rates. Composite rates are based on a specific dollar amount. Composite rates define rates simply as either Employee or Employer, without defining a tax class. The actual tax class used will be determined dynamically during processing based on the tax classes defined within the applicable deduction code. Tax classes A and B (after-tax and before-tax) are employee classes, and classes T and N (taxable and non-taxable) are employer classes. The Deduction Code cannot define more than one Employee tax class, nor more than one Employer tax class, unless a GTL or DPL effect is involved, in which case both N and T are allowed, since the T class will be managed by the imputed income processing.

You can enter rates using either the Composite method or theDetail method, but not both.

Composite Rates

Enter the rates that are based on a specific dollar amount. The appearance of the grid is based on the benefit rate type.

Note. The fields displayed in the rate data are dependent upon the rate type that you select.

Detail Rates

Access the Detail Rates grid.

Use the Detail Rates grid if you need to split employee premiums across Before and After Tax, or if you need to split employer premiums across taxable and nontaxable.

An example is premiums for domestic partner health coverage in the US, where the cost for qualified individuals can be Before Tax, but non-qualified individuals are After Tax.

Warning! PeopleSoft delivers a set of rates with an ID of IRS. PeopleSoft Enterprise Payroll for North America uses these IRS rates to calculate imputed income. The IRS table ID set should not be changed.

Defining the Percent of Gross Limit

Access the Amount Subject to Limit page.

Specify the portion of the benefit rate that is to be subject to the percent-of-gross limit defined on the Calculation Rules.

Setting Up Annual Benefits Base Rates

Some benefits, such as life and disability insurance, can be based upon the employee’s actual compensation rate or an annual benefits base rate (ABBR) that you define for the employee.

To set up annual benefits base rates, use the Annl Benef Base Rt Type Table (ABBR_TYPE_TBL) component.

This section discusses how to define annual benefits base rates.

Page Used to Set Up ABBR Types

Defining Annual Benefits Base Rates

Access the ABBR Type page.

Setting Up Calculation Rules

To set up calculation rules, use the Calculation Rules Table (CALC_RULES_TABLE) component.

This section provides an overview of calculation rules and discusses how to define calculation rules.

Understanding Calculation Rules

You use calculation rules to define how deductions are calculated for each benefit plan. Calculation rules only relate to rate-based plans or plans that require a compensation base, not a coverage base. When determining calculation rules, you need to understand:

• Compensation base and annual benefits base rate.

• (USF) Compensation base.

• As-of-date rules.

Compensation Base Versus Annual Benefits Base Rate

Calculation rules use an employee’s compensation as part of the definitions. If you are going to base the employee’s compensation on an amount other than the employee’s regular compensation rate, you can enter an amount in the Annual Benefits Base Rate field on the Compensation page of the Job Data component.

The term Base Benefits is a generic reference to the compensation to be used, whether it is the annual compensation rate on the employee’s job record or an alternate annual benefit base rate, and whether it is a single rate from a single job record or an aggregate across multiple jobs.

If a calculation rule specifies that the ABBR should be used, but the employee has not been assigned an ABBR, the system will use the employee’s regular compensation rate instead.

See Increasing the Workforce.

(USF) Compensation Base

The compensation base is set through the Personnel Action Request (PAR) process. You can:

• Use the adjusted regular compensation amount provided in the Expected Pay page accessed from the Compensation Data page of the PAR component. The regular compensation amount will be the base pay for the employee's compensation frequency with locality or LEO adjustments.

• Override the FEGLI base rate.

The system uses the regular adjusted compensation amount for benefit processing. The exception to this rule is FEGLI plans: you can have the system use a different base rate when processing FEGLI plans by overriding the FEGLI base. The FEGLI base mirrors the quoted total pay until it is overridden.

See (USF) Adding an Employment Instance.

As-Of Dates

The Calculation Rules table has several as-of-date rules that can be defined to control the calculation of age, service, and benefits base. These rules give flexibility in defining the reference date to be used for interval calculations, such as age and service), or flexibility to the determination of the effective date to be used when retrieving the base compensation data. The following rules are available:

• As of the current pay run’s pay-end-date (or as of the current processing date, for those applications that are not based on pay runs.)

• As of the current pay run’s check issue date.

• As of a specific month and day for the current year. This is often used to freeze compensation at the point of open enrollment, typically 01/01 of the year, or to prevent unexpected mid-year changes due to temporal events.

• As of a specific month and day for the previous year.

The Age As-Of rule has the following additional options:

• As of the next pay run’s pay end date. This is mainly used by USF users to protect age from changing mid pay-period.

• As of date of original enrollment in a benefit plan, date of first uninterrupted enrollment. This is mainly used by long-term care plans, whose costs are fixed at the point of enrollment.

If you use Multiple Jobs functionality, you must also tell the system which jobs to use when calculating the employee’s earnings.

Page Used to Set Up Calculation Rules

Defining Calculation Rules

Access the Calculation Rules page.

Effective Date

Must be the same as or prior to the effective dates of the one or more benefit program and benefit plan combinations that you associate the calculation rules with.

Demographics

Benefit Base

Source

Multiple Jobs

Optional Rate Limit

Setting Up Deduction Codes

To set up deduction codes, use the Deduction Table (DEDUCTION_TABLE) component.

This section provides an overview of deduction codes and discusses how to create deduction codes.

Understanding Deduction Codes

The Manage Base Benefits business process in Human Resources is designed to work with PeopleSoft Enterprise Payroll for North America and PeopleSoft Enterprise Payroll Interface. Calculating deductions accurately is an important payroll function.

To set up benefit deductions:

• Use the Deduction Table component (DEDUCTION_TABLE) to select the plan type (any plan type except General Deduction), enter a deduction code, and set up the deduction processing rules.

  See Defining Deductions.

  See Setting Up Deduction Data.

• Use the Benefit Plan Table component (BENEFIT_PLAN_TABLE) and other components in the Manage Base Benefits business process to set up the benefit plans.

  See Setting Up Benefit Plans.

• Use the Benefit Program Table component (BEN_PROG_DEFN) and other components in the Manage Base Benefits business process to build the benefit program and to define the deduction calculation rules.

  See Building Base Benefit Programs.

The Deduction Table component enables you to select a plan type, enter a deduction code, and set up the deduction processing rules that enable you to specify processing details such as deduction priorities, deduction tax classifications, deduction pay period schedules, and other special payroll process indicators. The Benefit Program Table component enables you to set up the deduction calculation rules, actual rates, rules, and routines used to determine the cost of the deduction. To calculate benefit deductions, payroll uses both the deduction processing rules from the Deduction Table component and deduction calculation rules from the Benefit Program Table.

Note. To set up the Benefit Program Table, you must enter deduction codes. Deduction codes are set up on the Deduction Table component through either Payroll for North America or Payroll Interface. However, if you are not using a PeopleSoft payroll application to calculate deductions, you can set up dummy deduction codes using other pages in Human Resources.

Designing a Deduction Strategy

When setting up deduction you need to make some basic decisions about your strategy before you set up deduction rules, and these decisions depend in part upon how you want to report deductions to employees.

Here’s a quick reference that shows the basic benefit deduction pay stub reporting options and how to make them happen:

Page Used to Set Up Deduction Codes

Creating Deduction Codes

Access the Deduction Table - Setup page.

To create a deduction code, enter the effective date and the long description.

If you are using Payroll for North America or Payroll Interface, refer to the documentation for those products for information on how to set up the Deduction Table component (DEDUCTION_TABLE).

See PeopleSoft Enterprise Payroll for North America 9.0 PeopleBook

See PeopleSoft Enterprise Payroll Interface 9.0 PeopleBook

Setting Up Special Accumulators

To set up special accumulators, use the Special Accumulator Table (SPCL_EARNS_TABLE) component.

This section provides an overview of special accumulators and discusses how to enter special accumulator information.

Understanding Special Accumulators

Sometimes it is necessary to define an employee’s earnings based on specific types of earnings rather than total gross earnings. Special accumulators act like a bucket accumulating only the earning types you want included when determining the employee’s earnings.

Special accumulators are used during deduction calculations and limit testing. You might have a benefit deduction that you base on an earnings amount other than total gross.

For example, you might use a special accumulator to identify all the separate earnings to include when accumulating employee earnings for 401(k) deductions.

Typically, you want to define a special accumulator for qualified savings plans, such as 401(k) that are subject to limit testing.

You first name the special accumulator using the Special Accumulator Table. The next step is to tie specific earnings types to that special accumulator.

Page Used to Set Up Special Accumulators

Entering Special Accumulator Information

Access the Special Accumulator Table page.

Setting Up Limits for Qualified Savings Plans

To set up limits for qualified savings plans, use the Limit Table (LIMIT_TBL) component.

This section provides overviews of limits and discusses how to:

• Set up 401(a) limits.

• Set up 402(g) limits.

• Set up 403(b) limits.

• Set up 415 limits.

• Set up 415(c) limits for 403(b) plans.

• Set up deduction class order for 415 tables.

• Set up 457 limits.

• Set up user defined limits.

Understanding Limits

Certain qualified benefit savings plans may be subject to government regulations. Limits are tied to deduction codes. When your payroll department runs the pay calculation process, the system checks to see whether a deduction has any limits associated with it. If it does, the system runs the testing calculations and makes the limit adjustments to every affected employee’s records. If a deduction cannot be taken, it is reported with the appropriate reason-not-taken code.

Understanding 401 Limit

The 401 limit is designed to eliminate the tax advantage highly compensated employees have by participating in qualified plans. This limit sets up a maximum cap on the employee’s annual earnings during the calculation of the employee’s contribution. When calculating the employee annual earnings, the 401 limit is applied against the Special Accumulator field defined on the Savings Plan tables, not on the Special Accumulator field on the Limit Table.

Understanding 402 Limit

The 402 limit imposes a flat dollar annual limit on the amount an employee can contribute as an elective deferral.

Understanding 403 Limit

The 403 limit defines the parameters that extend the maximum amount of the elective deferrals that an employee (with 15 or more years of service) in a qualifying organization can contribute to the 403(b) savings plans. In addition to the 403 limit, 403(b) savings plans are also subject to 401, 402, and 415 limits.

To calculate this amount:

1. Multiply the employee’s eligible earnings by 20%.

2. Multiply the figure by the employee’s total years of service.

3. Subtract the prior year’s pretax contributions.

Understanding 415 Limit

The 415 limit restricts the total amount an employee can contribute to defined savings plans. 401(k) plans are the most common type of defined savings plans to fall under Section 415, but other types include profit-sharing, money purchase pensions, stock bonuses, thrift savings, and target benefit plans.

Employee year-to-date contributions cannot exceed either:

• A specific percentage amount of the employee’s eligible earnings.

• A specific flat annual amount.

If, for a given payroll, the employee’s contribution exceeds the limits, the contribution must be reduced to fall within the limits. Use an Other Common ID when you need to keep your companies separate for tax purposes, but need to maintain accurate current employee balances across companies for calculating Section 415 limits.

Understanding 415Z Limit

This is identical to the 415 limit with the exception that it applies to 403(b) plans only.

Understanding 457 Limit

Section 457 plans are deferred compensation plans offered by state and local governments and employers that are exempt from federal income tax. The amount deferred annually by an employee cannot exceed a specific flat amount or 100% of the employee’s taxable income, whichever is less.

Note. Section 457 plans are not qualified plans and are not subject to the tax code's nondiscrimination and related requirements. However, they are subject to deferral limits and mandatory distribution rules that apply to qualified plans.

Understanding Limit Extensions

Employees, who meet specific eligibility criteria and elect the applicable option, can increase their elective deferrals in savings plans subject to certain limits. The increase is handled with limit extensions, where, in general, the sum of the limit table amount and the extension amount are used instead of the limit table amount. Limit extensions are stored on the Savings Management (SAVINGS_MGT_EE) record.

The limit extensions are:

• 402 - Catch Up, for employees with 15 or more years of service in a 403(b) plan.

• 457 - Catch Up, for employees within three years of retirement in a 457 plan.

• 402 - Age 50, for employees age 50 or more in a 401(k) and/or a 403(b) plan.

• 457 - Age 50, for employees age 50 or more in a 457 eligible governmental plan.

• 401(a) - Adjust Eligible Earnings for 401(k), 403(b) and 457 plans.

See Also

Managing Savings Plans

Common Elements Used to Define Limits

Page Used to Define Limits

Setting Up 401(a) Limits

Access the Limit Table page for 401(a) limits.

Setting Up 402(g) Limits

Access the Limit Table page for 402(g) limits.

Setting Up 403(b) Limits

Access the Limit Table page for 403(b) limits.

403(b) Service Prorated By	Select the proration method to use for the 403(b) service year calculation in the Projection process. This information is taken from the employee’s job record.
Alternative Limits Parameters and 402(g) Limits and Cap Expansions	All of these fields are determined by IRS regulations. Enter the current approved standards.

Setting Up 415 Limits

Access the Limit Table page for 415 limits.

Setting Up 415(c) Limit for 403(b) Plans

Access the Limit Table page for 415(c) Limit for 403(b).

Setting Up Deduction Class Order for 415 Limit Tables

Access the Installation Table.

If you are setting up the 415 Limit Table, go into the Installation Table to set the deduction class order.

Benefits Deduction Class Order

Setting Up 457 Limits

Access the Limit Table page for 457 limits.

Max Annual 457 Catch Up (maximum annual 457 catch up)

Section 457 plans have a catch-up rule. Within three years of retirement, a participant may increase the amount contributed to the savings plan. This field is determined by IRS regulations.

Setting Up User Defined Limits

Access the Limit Table page for User Defined limits

User Defined Per Check Limit can be used to limit a deduction across two plans. For example the table can be set up to limit the employer contribution across two plans.

Note. Unlike the other limits, User Defined Per Check Limit is set to limit in one pay check period. The others set to limit plan balances.

Setting Up Leave and Vacation Buy/Sell Earnings

Earnings types are the various ways in which an employee might receive income. The benefit-related earnings that most concern earnings types are leave plans and vacation buy/sell plans.

To have the system process these earnings during the payroll process, you’ll use the Earnings Table to create these codes. The Earnings Table stores the business rules that define how to calculate employee earnings.

Setting Up Payroll Information for Leave Accruals

This section assumes that your payroll department uses Payroll for North America. If your organization uses another payroll accounting system, you’ll need to ensure that the proper information is provided to the system for the correct processing of leave accruals. Follow these basic steps, making appropriate choices from your options.

1. On the Earnings Table - Special Process page enter the leave plan type for the leave plan you’re defining in the Leave Plan Accrual group box.

2. Select the appropriate Add To Accrual Balance check box.

   The Add To Accrual Balance selection is important during the PeopleSoft Payroll Confirm process. It enables you to indicate where the accrued hours will be posted as unprocessed data on the employee’s Leave Accruals pages.

   You can choose to add hours to the Taken, Service Hours, Adjusted, Bought, or Sold accumulators.

   The Leave Accrual process retrieves data from these sections to calculate the leave accrual award and the resulting leave accrual balance.

3. Select Taken when you want these hours to reduce the accrual balance (as in taken vacation hours or sick hours—but not regular hours).

   Select Service Hours when the associated leave plans accrue a leave balance based upon the number of hours worked, and the hours for this earnings code should be considered in the accrual calculation.

   Select Adjusted to define a special Earnings Type that adjusts accrual balances by adding to or subtracting from employee accrual balances.

   Select Bought or Sold only when you are using this earning as the Vacation Buy or Vacation Sell earning.

See Also

Managing Leave Plans

Setting Up Vacation Buy and Sell Earnings

Organizations typically allow employees to buy or sell vacation once, at the beginning of a plan year, based on vacation buy and sell earnings, deduction, and benefit plan rules.

To set up vacation buy/sell earnings:

1. Access the Earnings Table - Special Process page.

2. For Vacation Buy plans, select Bought in the Add to Accrual Balance group box.

3. For Vacation Sell plans, select Sold in the Add to Accrual Balance group box.

See Also

Managing Vacation Buy/Sell Plans

Setting Up Benefit Certifications

To create a benefits certification, use the Certification Definition (BN_CERTIF_SETUP) component.

This section discusses how to define benefit certification forms.

Understanding Benefit Certification

The Benefits Certification contains a series of statements you, as the Administrator, need to define for a participant to answer.

There are three types of questions, or statements you can present to the participant in the Benefits Certification display:

• Yes/No

• Rating

• Multiple choice

The Yes/No Question

Each Yes/No statement appears as a single statement with a radio button displayed next to it. The default display value for each response is left blank. For each statement, the resulting answer is whatever value the Administrator enters as a response value multiplied by the weight value, if any.

The Rating Question

Each Rating statement appears as a single statement with a set of option buttons. This form appears similar to a typical polling statement. The default display for each response in the set is Not Selected. When evaluating each of the responses, you must select one option button. Each option button in each statement can have a pre-defined numeric value. The example below results in answers of 5, 4, 2 and 3 (assuming that they are in a sequence of 5 - 1).

The Multiple choice Question

Each Multiple choice statement appears as a single statement with a check box that has a designated value or rank. The default display for each response in the set of options is Not Selected. You can select one or more of the options in each statement. In the example below, the statement results in an answer of 6 (assuming that they are in a sequence of 1 – 5).

Reviewing the Certification

Once you have created your benefits certification, you can preview it by clicking the Test Certificate button on the Certification Definition page. This certificate, if assigned to a particular benefit plan or dependent relationship, will appear in eBenefit self-service to the participant.

See Also

Setting Up Dependent Relationships

Setting Up eBenefits

Page Used to Create Benefit Certification Forms

Defining Benefit Certification Forms

Access the Certification Definition page.

Default Value	Enter a minimum value for the certification to pass.
Apply Weighting	Select to control the display of the Weight field in the Questions group box below. The values are: None (the default) Multiplier: Since the answers to the questions are “weighted,” or have values. The system multiplies these values by a multiplier (defined here) to allow the administrator to assign more weight or importance to various questions. The Weight field is required when Multiplier is selected.
Test Certificate	Select to display the Certification Definition page that appears to the participant in the eBenefits self-service application when enrolling in benefit plans. You can also test the certificate to verify the values of the answers and the certificate are calcutaing properly.

Instructions

Enter instructional text to display to the participant. This is optional.

Agreement

Questions