Understanding Function Result Aliases
This chapter provides overviews of function result aliases and actuarial factor aliases and discusses how to:
Create function result and actuarial factor aliases.
Use form codes.
Understanding Function Result Aliases
Certain function results can produce multiple results. Because the function result name always references the primary result, you need a way to reference any secondary results.
The final average earnings and cash balance accounts functions both enable you to specify whether to apply limits. If you apply limits, as you will in all of your qualified plans, the function produces limited and unlimited results. The function result name references the result according to how you configure your definition: limited if the definition uses limits, unlimited if it does not. If the function result is limited, the secondary result is the unlimited equivalent. If the function result is unlimited, the secondary result is identical to the primary result.
The participation function produces a participation status and a participation date. The function result name references the status only. The secondary result is the date.
To reference any of the secondary values produced by these function results, you have to set up a special kind of alias: a function result alias.
Three functions, participation, final average earnings, and cash balance accounts, always produce results beyond those referenced by the function result name. These are the results you reference with function result aliases.
Typically, you reference function result aliases for final average earnings and cash balance accounts within the benefit formula.
You might use the participation date when you set up a service definition if you want to exclude service before the participation date.
Understanding Actuarial Factor Aliases
When you convert a pension payment from one payment form to another, you use factors to determine an actuarially equivalent amount. A factor alias calculates the factor based on:
The actuarial assumption set.
The two forms of payment.
The ages of the participant and the beneficiary (because annuities are paid over the recipient's lifetime). Typically these are the ages at benefit commencement.
Use the factors that you create anywhere your plan needs them. If your cash balance plan produces a lump sum amount, but your normal form is an equivalent annuity, you might set up a lump-sum-to-annuity conversion factor to include in your benefit formula. When you determine the annuity value of an employee's contributions, you use a factor alias to perform the conversion.
You do not need to use factors when you set up your optional form sets for each plan; the optional forms of payment function handles the conversions.
Creating Function Result and Actuarial Factor Aliases
To create function result actuarial factor aliases, use the Function Result Aliases (FNC_RSLT_ALIASES) and Factor Aliases (FACTOR_DEFINITIONS) components.
This section lists the pages used to create function result and actuarial factor aliases and discusses how to:
Set function result alias options.
Set factor alias options.
Pages Used to Create Function Result and Actuarial Factor Aliases|
Page Name |
Definition Name |
Navigation |
Usage |
|
PA_ALIAS_AUTO_ASGN |
Set Up HRMS, Product Related, Pension, Variable Definitions, Function Result Aliases, Function Result Aliases |
Create a function result alias. |
|
|
PA_FACTOR_SETUP |
Set Up HRMS, Product Related, Pension, Variable Definitions, Factor Alias, Factor Alias |
Set up the factor parameters. |
Setting Function Result Alias Options
Access the Function Result Aliases page (Set Up HRMS, Product Related, Pension, Variable Definitions, Function Result Aliases, Function Result Aliases).
|
Associated Function Result |
Select the function result that produces the extra value. |
|
Associated Concept |
Select the results you want to reference:
|
Setting Factor Alias Options
The factor utility calculates actuarial factors that convert payment amounts from one optional form of payment to another. You use the Factor Alias page to specify the information that the factor utility uses in this conversion.
Access the Factor Alias page (Set Up HRMS, Product Related, Pension, Variable Definitions, Factor Alias, Factor Alias).
Actuarial Assumption Set
|
Assumption Set Name |
An actuarial assumption set incorporates assumptions about mortality, interest, and payment frequency. For example, if you want to convert from a lump sum to a monthly annuity, the actuarial assumptions should specify a monthly payment frequency. |
|
Employee Age |
Enter the annuitant's age. |
|
Beneficiary Age |
Enter the beneficiary's age. |
You can enter constant ages or aliases for these fields.
From and To
A factor is used to convert payments from one form to another—for example, from a lump sum to a single life annuity, or from a single life annuity to a 50 percent joint and survivor annuity. You define the two payment forms in the From and To group boxes.
|
Form Code |
Describe each form by entering a form code. Select from these options: Certain Only Installment, Joint and Survivor Annuity, Life Annuity, Level Income Option, Last to Survive Annuity, Lump Sum, Pop Up Annuity, Reversionary Annuity. There is also a Spouse J&S Demonstration option. This is used on the optional forms pages when a plan provides an automatic benefit to a spouse. Do not select this option on the Factor Alias page; instead, use Joint and Survivor Annuity. Certain forms incorporate additional parameters, which are specified in Years Certain and Pct Continued fields. |
|
Years Certain |
Enter the number of years certain if:
For example, to enter a 5-year certain and continuous form, select Life Annuity in the Form Code field, and enter 5 in the Years Certain field. |
|
Pct Continued (percent continued) |
If the option includes a survivor benefit, enter the percent continued to indicate the survivor's continuing percentage of the original annuity. For example, joint and survivor and last to survive annuities include survivor benefits. For example, to enter a 50 percent joint and survivor form, select Joint and Survivor Annuity in the Form Code field, and enter 50 in the Pct Continued field. |
See Also
Using Form Codes
When you define a form of payment, you provide the following information:
Form code (Form Code field).
Guaranteed number of payments (Years Certain field).
Continuing percentage (Pct Continued field).
This is true whether you use the factor utility (the Factor Alias page) or the optional forms of payment function.
The factor utility automatically applies the appropriate actuarial equation to a form code. The following table indicates, by form code, when you must enter information in the Years Certain and Pct Continued fields. In the column labeled Options Required?, Y means you must enter information, N means the information is not applicable, and O means it is optional.
|
Form Code and Full Name |
Options Required? |
Description |
|
CO Certain Only Installment |
Years Certain: Y Pct Continued: N |
An amount is paid for a specified number of years and no longer. If the participant dies, any remaining payments are made to a beneficiary. |
|
JS Joint and Survivor Annuity |
Years Certain: O Pct Continued: Y |
One amount is paid until the participant dies. Then a survivor benefit, reduced to the specified percent continued, continues until the beneficiary dies. |
|
LIFE Life Annuity |
Years Certain: O Pct Continued: N |
A periodic amount is paid for the life of the participant. |
|
LIO Level Income Option |
Years Certain: O Pct Continued: O |
A monthly payment is reduced at the social security retirement age by the estimated amount of money to be received from social security. |
|
LTS Last To Survive Annuity |
Years Certain: O Pct Continued: Y |
Similar to a joint and survivor annuity, except that the amount is reduced when either the participant or the beneficiary dies. |
|
LUMP Lump Sum |
Years Certain: N Pct Continued: N |
A onetime payment. |
|
POP Pop Up Annuity |
Years Certain: O Pct Continued: Y |
Similar to a joint and survivor annuity, except that the participant's otherwise reduced benefit "pops up" to the single life annuity level if the beneficiary predeceases the participant. |
|
REV Reversionary Annuity |
Years Certain: O Pct Continued: N |
On the retiree's death, the entire benefit is paid as a life annuity to a beneficiary. The system's actuarial calculation of a reversionary annuity assumes that the benefit is forfeited if the beneficiary predeceases the retiree. If your plan rules differ, use a different method for calculating this optional form. If you enter a years certain, the certain period starts when the beneficiary begins receiving payments. |
|
SPJS Spouse J&S Demonstration |
Years Certain: O Pct Continued: Y |
No actual benefit. This is informational only. It shows the benefit that a spouse loses if the participant names a non-spouse beneficiary. |
Whenever you enter a value in Years Certain, any payments remaining after the participant dies are paid to a beneficiary.
There is no separate form code for certain and continuous forms of payment. You create these forms by adding years certain criteria to other forms. Typically, you add to a single life annuity (LIFE), but you might also add to joint and survivor and other forms. For example, to set up a 10–year certain and continuous annuity with no joint and survivor criteria, enter LIFE in the Form Code field and 10 in the Years Certain field.