Pension Plan Setup OverviewThis chapter discusses:
Pension plan setup.
Pension plan benefits setup.
Pension Plan Setup OverviewYou set up pension plans in the PeopleSoft HR: Manage Base Benefits tables. After you set up the basic plan definition, you can set up the calculation rules in Pension Administration.
For contributory plans, you can use PeopleSoft HCM to calculate payroll deductions for pension contributions. In this case, you must:
Create deduction codes.
Create deduction calculation rules.
Put the plan into a benefit/deduction program.
Enroll employees so that the deduction or payroll processing can take the deduction.
Enrollment doesn't affect pension calculations; it is only used for payroll deductions.
Note. The Pension Administration standalone configuration includes all the benefits pages and tables necessary to set up pension plans, but the standalone configuration doesn't support payroll deduction processing.
See Also
Deducting Pension Contributions
Pension Plan Setup
You need to complete only two pages to create a basic pension plan. However, for contributory plans where PeopleSoft HR: Manage Base Benefits or PeopleSoft Payroll for North America calculates the deductions, there are additional steps.
Basic Pension Plan Data Setup
Use the Benefit Plan Table page to add the plan and the Pension Plan Table page to add pension-specific information about the plan.
See Also
Entering Benefit Plan Information
Contributory Element Addition
To establishing deduction processing for contributory plans you must:
Ensure there is a unique plan type.
If you have more than six contributory plans, you need to add additional plan types to the translate table.
Create a deduction code for each contributory plan.
Set up the basic pension plan data.
Add the plan to a benefit program.
See Also
Pension Plans Benefit Setup
Perform all of the following setup in PeopleSoft HR: Manage Base Benefits pages. PeopleSoft supplies only summary information here except for the example of a Contributory Plan definition.
This section discusses:
Plan type usage and benefit plan setup.
Pension plan setup completion.
Benefit program setup.
Plan Type Usage and Benefit Plan Setup
PeopleSoft HR: Manage Base Benefits uses plan type to control much of its processing. Using plan type, the system can distinguish pension plans from health plans, savings plans, and various other categories of benefit plans. Plan types are translate values. When setting up a benefit plan, you first select a plan type.
See Also
Pension Plan Setup Completion
Use the Pension Plan Table page to complete the plan setup.
Part of the completion of the pension plan is defining contributory plans.
Consider a plan that takes 2 percent of earnings up to 50,000 USD and 3 percent of earnings above that amount. Caesar is paid monthly; he earns 5,000 USD per month. Each month, the system annualizes the current 5,000 USD of earnings to arrive at an annual salary of 60,000 USD. The system then calculates Caesar's total annual contribution based on that assumed annual salary: 2 percent of 50,000 is 1,000, and 3 percent of the remaining 10,000 is 300, for a total of 1,300. So each month, the system deducts one twelfth of 1,300, or 108.33 USD.
If Caesar leaves the company after six months and 30,000 USD of earnings, his total contributions would be 650 USD, slightly more than the 600 USD he would have contributed if the system applied the deduction percentages based on year-to-date totals. You run into similar discrepancies with employees whose pay rate changes during the year or who don't always get paid the same amount in each paycheck.
See Also
(USA) Entering Pension Plan Details
Benefit Program Setup
You must set up benefit programs before enrolling employees in a benefit plan. You only enroll employees in a pension plan if the plan is contributory and you are using the HRMS system to calculate deductions that should be taken from employee paychecks.
See Also
Building Base Benefit Programs