Maintaining Employee Pension Data

This chapter provides an overview of pension status codes and discusses how to:

• Maintain pension status codes.

• Maintain employee plan data.

• Maintain consolidated payroll data.

• Maintain employee regulatory data.

• Maintain pension beneficiary data.

Understanding Pension Status Codes

This section provides overviews of:

• Pension status code usage.

• Pension status code maintenance.

• Pension status code usage in calculations.

Pension Status Code Usage

Pension status codes categorize participants based on pension-related information. Pension status codes are plan specific and effective-dated, enabling you to track an employee's changing status in a plan over time. These statuses are the foundation for your actuarial valuation extract and Form 5500 reporting.

A pension status code describes a plan participant using a three-character code. The first character indicates the payee type:

• A: Active employee.

• T: Terminated employee.

• R: Retired employee.

• D: Disability retiree (employee with a disability pension).

• B: Beneficiary.

• Q: Qualified Domestic Relations Order (QDRO) alternate payee.

• X: Deceased participant.

The second and third characters indicate the payment status:

• DF: Deferred payments.

• PY: Receiving payments (the payee is currently receiving payments).

• ST: Stopped payments.

Pension Status Code Maintenance

The following table describes how pension status codes are maintained:

The five deferred benefit statuses (TDF, RDF, DDF, BDF, and QDF) are sometimes maintained manually and sometimes automatically:

• Set these manually (or using periodic processing for TDF) at the time that you create the payee records in preparation for the first pension payments.

• If payments are later suspended, the payment process automatically reassigns the deferred benefit status.

Pension Status Code Usage in Calculations

Depending on how you set up your calculation rules, the pension status might be used in a calculation. For example, service might accrue while an employee has an active pension status, but not when the employee has a terminated pension status.

See Also

Running Periodic Processes

Creating Retiree Payments

Maintaining Pension Status Codes

This section lists the page used to review and maintain pension status codes and discusses how to review and modify pension status.

Page Used to Review and Maintain Pension Status Codes

Reviewing and Modifying Pension Status

Access the Identify Pension Status page (Pension, Pension Information, Identify Pension Status, Identify Pension Status).

Pension Status

If an employee or pension payee dies, select either: Deceased-With Beneficiary. Deceased-No Benefit/Beneficiary. If you're preparing to pay a retiree, beneficiary, or QDRO alternate payee, select one of the following: Retired-Deferred Benefit. Disability Retire-Deferred. Beneficiary-Deferred Benefit. Alt Payee-Deferred Benefit (alternate payee, deferred benefit).

See Also

Defining Payee Cross-References

Updating Pension Status When a Retiree Dies

Maintaining Employee Plan Data

This section provides an overview of employee plan data, lists the common element used in this section and the pages used to maintain employee data, and discusses how to:

• Adjust cash balance accounts.

• Adjust contributory accounts.

• Maintain employee minimum benefit data.

• Adjust calculated service credit.

• View and update startup values.

• Maintain preretirement survivor annuity (PRSA) coverage history.

Understanding Employee Plan Data

You can maintain a variety of data used in pension calculations:

• Manually adjust the balances for employee accounts, cash balance accounts, or service.

• Enter starting balances for employee accounts, cash balance accounts, or service.

• Enter entitlements based on participation in a prior plan:

  • Service minimum.

  • Benefit amount minimum

  • Automatic right to participate in a plan.

• If you charge employees for PRSA coverage, track the employee's PRSA coverage elections so that you can accurately calculate the coverage penalty.

Common Element Used in This Section

Pages Used to Maintain Employee Plan Data

Adjusting Cash Balance Accounts

Access the Cash Bal Adjustments page (Pension, Pension Information, Update Employee Plan Data, Cash Bal Adjustments).

Function Result Name	Enter the name of the cash balance account defined in the plan rules in Pension Administration.
Transaction Status	Displays Pending until periodic processing applies the adjustment to the employee's permanent cash balance account history. Then, the system updates the status to Applied.
Reason	Select a value that indicates the reason for the adjustments.

Adjusting Contributory Accounts

Access the Account Adjustments page (Pension, Pension Information, Update Employee Plan Data, Account Adjustments).

Employee account adjustments can include:

• Correcting data problems with employee accounts.

• Establishing the cost and amount of purchasable service for a service purchase arrangement (using separate transactions).

• Recording service buyback repayments (when an employee repays withdrawn contributions) or service purchase payments (when the employee makes payments by check, rather than by payroll deduction).

You make these adjustments on the Account Adjustments page.

Understanding Employee Account Types

To understand employee account adjustments, you must understand the three types of employee accounts:

• A plan's main contribution account tracks the actual dollar value of the account.

• A withdrawal subaccount is a subaccount to the main contribution account. When an employee withdraws contributions, the system establishes a negative balance in the withdrawal account. The negative balance corresponds to the amount that the employee withdrew and rolls up to the main account to reduce the main account value by that amount. If the employee later repays contributions, the repayments are credited to the withdrawal account. When the entire balance is repaid, the withdrawal account balance is zero. All the repayment activity in the withdrawal account also rolls up to the main contribution account, so when the withdrawal account reaches zero, the main contribution account has also been credited with full repayment.

• A purchase subaccount is also a subaccount of the main contribution account. When an employee is eligible to purchase service for time not actually worked, you establish the purchase prices by establishing a negative balance in the purchase account. Unlike a withdrawal account, this initial balance does not affect the main account balances. However, payments to the purchase account work like payments to a withdrawal account. You can credit payments to the purchase account until the balance reaches zero and all the payments roll up to the main employee account.

Note. You can enter adjustments for all three types of accounts. Be sure to enter the transaction in the appropriate account.

Adjusting or Establishing Purchasable Service

When an employee decides to purchase service, decide how much the employee owes in contributions and back interest and enter this as a negative adjustment to the purchase account. Also, establish the amount of service that corresponds to this purchase amount, using another transaction on this same page. Because the transaction dates are the same, the system associates the dollar amount that you enter with the service amount that you enter.

Note. Always enter two transactions to establish a service purchase program for an employee: one transaction establishes the cost of the service, and the other establishes the amount of service. Using the same transaction date for both transactions ensures that the system associates the two values.

When you enter the service adjustment, select the adjustment reason Purchasable Service Adjustment. This causes the page to change so that, instead of entering credit and interest amounts, you enter a purchasable service amount.

Enter the amount of service that the employee is eligible to purchase.

The system includes an online calculator to help you determine how much service the employee can purchase. Click the Calculate Purchasable Service button to access the calculator. In the service calculator, enter the dates for the service period. Click the Calculate button to have the system perform the calculation and display the result. The system calculates the service purchase period using the method that you specified on the Plan Aliases page.

Checking the Adjustment Status

When you enter an adjustment on the Account Adjustments page, this does not affect the account balance until you run employee accounts periodic processing for the period that includes the transaction date. That is, the adjustments entered on this page are adjustment requests that are translated into actual adjustments after periodic processing.

The adjustment status is pending until periodic processing incorporates the adjustment into the actual employee account, at which point the system updates the status to Applied.

See Also

Administering Contributory Plans

Creating the Plan Implementation and Plan Aliases

Maintaining Employee Minimum Benefit Data

Access the Prior Plan History page (Pension, Pension Information, Update Employee Plan Data, Prior Plan History).

When employees participated in a prior plan (for example, a plan of a subsidiary that you have acquired), this prior plan participation might guarantee certain minimum benefits. Typically, the guarantees are for a specified benefit amount, minimum service credit, or immediate participation. Similar guarantees apply when a plan amendment or regulatory change has the potential to reduce an employee's benefit. The law protects employees from cutbacks by requiring that the benefit accrued as of the date of the change be treated as a minimum benefit.

Calculations use the data that you enter here only if you explicitly reference the data in the plan parameters. For example, your plan's eligibility requirements might automatically grant eligibility to employees for whom the Participating check box is selected. If your plan does not check the status of this field, then selecting this check box has no effect.

However, even if your plan rules do not incorporate the minimums, benefits that are less than the minimum produce a message on both calculation results pages and the calculation worksheet: Benefit Amount Less than Minimum Benefit.

Adjusting Calculated Service Credit

Access the Service Adjustments page (Pension, Pension Information, Update Employee Plan Data, Service Adjustments).

When you administer a service buyback or service purchase program, the system automatically generates service adjustments.

Not all payments generate service adjustments, because the plan rules control when partial payments cause service adjustments. This can be on the employee's first payment, on the employee's final payment, or on a prorated basis for every payment.

Note. When administering a service buyback or a service purchase, you do not need to create manual service adjustments. The adjustments are all automatically generated, based on withdrawal or payment activity. Enter only manual service adjustments to correct errors in the employee's service history.

Service Adjustments

See Also

Creating the Plan Implementation and Plan Aliases

Administering Contributory Plans

Viewing and Updating Startup Values

Access the Startup History page (Pension, Pension Information, Update Employee Plan Data, Startup History).

Because pension calculations are based on information from an employee's entire career, you must load large amounts of historical information during your PeopleSoft implementation. For accruals, such as service, cash balance accounts, and employee accounts, you can load either the raw data for calculating benefits or a starting balance and an as of date.

Maintaining PRSA Coverage

Access the PRSA Coverage page (Pension, Pension Information, Update Employee Plan Data, PRSA Coverage).

Start Date	For each benefit plan, enter the start date for each change in coverage.
Participation Status	For each benefit plan, select the employee's status: participating or not participating in the plan.

The law requires that all qualified defined benefit plans provide a form of death benefit for the spouses of participants who die before retirement. The plan must offer married participants qualified PRSA coverage. The amount of the benefit depends on when the participant dies.

If the plan requires participants to pay the cost of the PRSA coverage, the participant's pension benefit is reduced accordingly. The reduction is usually based on the amount of time that the coverage was in effect. If employees must pay for coverage, they can elect not to have PRSA coverage. Because employees can change their election, they have a history of covered and not covered periods of time.

When the system calculates the PRSA reduction factor, it checks the employee's PRSA coverage history to determine the amount of time that the employee had PRSA coverage.

Note. If no coverage history exists, the system assumes that the employee has never had PRSA coverage (that is, the employee elected not to have such coverage at all times). For this reason, you might record coverage as a workflow process when you hire an employee.

For example, Douglas was single when he was hired, so he did not need PRSA coverage. No coverage election was recorded because the system assumes that employees with no coverage history are not covered. When Doug married in 1983, coverage was activated. When he divorced in 1992, coverage was again declined.

Maintaining Consolidated Payroll Data

This section provides an overview of consolidated payroll data, lists the common elements used in this section and the pages used to maintain consolidated payroll data, and discusses how to:

• Use consolidation overrides.

• View an employee's consolidated earnings.

• View an employee's consolidated hours.

• View an employee's consolidated contributions.

Understanding Consolidated Payroll Data

Pension Administration consolidates payroll data (such as earnings, hours, and contributions) into periodic amounts. You run the consolidation process as part of your periodic processing. Each pension plan has its own rules for consolidating, and therefore has its own consolidation results.

Consolidation results are effective-dated. The normal mode for periodic processing is to continue to add segments to the existing effective-dated history, so there is one effective date (the hire date) with rows for each consolidation period.

However, you can create a new effective-dated history. You can either delete the old history or keep it and insert a new effective-dated history to supersede the original history. This occurs when you run consolidation processing in Delete and Rebuild mode, which erases existing results and creates new results, or in Create New Consolidations mode, which creates new results without erasing the old ones.

Normally, the earliest effective date for an employee's consolidation is the first date on which you ran the consolidation process for that employee. Additional consolidation results are added under the same effective date. However, if you build a new history using Delete and Rebuild mode, the new effective date is the employee's hire date.

If you build a new history without deleting the existing history using Create New Consolidations mode, the new effective date is the date on which you ran the process. In this case, you now have multiple effective-dated consolidation histories. When you run a calculation, the system uses the consolidation history effective on the rules as-of date that you specify at calculation time, rather than the history effective on the date on which you actually run the calculation.

See Also

Running Periodic Processes

Common Elements Used in This Section

Pages Used to Maintain Consolidated Payroll Data

Using Consolidation Overrides

You might need to overwrite the calculated earnings or hours consolidation amounts. Use this feature sparingly, because it's best if your consolidation results map cleanly to the source data from payroll.

The pages displaying the consolidated data include display-only fields with the results of consolidation processing and available fields in which you can override these calculated values. You can override amounts for existing periods, but you cannot insert new rows to create new periods.

To override consolidated data:

1. For each period in a consolidation history, select the Override or Override Indicator check box to substitute your own values for certain fields.

   Note. If you enter overrides without selecting one of these check boxes, the system ignores the information that you enter.

2. Indicate an override type.

   • If you select Permanent, the system prevents you from rerunning consolidation in Delete and Rebuild or Create New Consolidations mode. This prevents you from losing your manually entered override. To delete this permanent override, return to this page and remove the override or mark it as Temporary.

   • If you select Temporary, any rebuild of the existing history deletes the override without issuing a warning. For example, if you discover a problem with an employee's data, enter an override so that you can complete your current calculations and sort out the payroll data problem later. When you uncover the data problem, make corrections, reconsolidate in Delete and Rebuild mode, and the Temporary override does not stop the rebuild.

3. Enter the actual override values.

   Each consolidation (including earnings, hours, and contributions) has override fields corresponding to the final results for the period, such as the final adjusted hours for the period. Override fields do not exist for intermediate results, such as the actual hours worked.

Final results fields for each consolidation are calculated as follows:

• Consolidated earnings include the earnings amount, the partial period indicator, and the partial period fraction.

• Consolidated hours include the hours amount and the partial period indicator.

• Consolidated contributions include pretax and posttax amounts.

Note. If the override indicator is selected, you must enter data in all of the override fields. If you fail to enter data, the system enters zero for numeric fields and deselects check boxes.

See Also

Running Periodic Processes

Viewing an Employee's Consolidated Earnings

Access the Earnings History page (Pension, Pension Information, Review Consolidation Results, Earnings History).

Note. If an employee provides a social security earnings history, such as a document from the Social Security Administration or pay stubs from previous employers, you must use this earnings history for social security calculations. Rather than entering the new information as an override to the consolidated earnings (which might interfere with other calculations based on these earnings), enter the data on the Yearly Soc Sec Earnings page.

Multiple views of this page are available by clicking the tabs in the scroll area. In this chapter, fields that are common to all views appear first.

Common Page Information

Consolidations Tab

Consolidations Overrides Tab

See Also

Using Consolidation Overrides

Viewing an Employee's Consolidated Hours

Access the Hours History page (Pension, Pension Information, Review Consolidation Results, Hours History).

Common Page Information

Consolidations Tab

Consolidations Overrides Tab

See Also

Using Consolidation Overrides

Viewing an Employee's Consolidated Contributions

Access the Contribution History page (Pension, Pension Information, Review Consolidation Results, Contribution History).

Common Page Information

Consolidations Tab

Consolidations Overrides Tab

See Also

Using Consolidation Overrides

Maintaining Employee Regulatory Data

This section provides an overview of employee regulatory data, lists the pages used to maintain employee regulatory data, and discusses how to:

• Enter historical 415(e) information.

• Enter an employee's actual social security earnings history.

Understanding Employee Regulatory Data

Pension calculations often require data for regulatory purposes. Although much of the necessary data exists in the PeopleSoft HCM database, you must track pension-specific information in Pension Administration:

• You enter historical 415(e) information about a participant's contributions to defined contribution (DC) plans that you sponsor.

  The system does not calculate the DC information. You enter the data directly on the 415(e) Limit page.

• You enter an employee's actual social security earnings history.

  Social security calculations require that you use the actual earnings history, rather than your plan assumptions, if the employee provides this information. You enter this information on the Yearly Soc Sec Earnings page.

Pages Used to Maintain Employee Regulatory Data

Entering Historical 415(e) Information

Access the 415(e) Limit page (Pension, Update Regulatory Information, 415(e) Limit, 415(e) Limit).

If you sponsor both defined benefit (DB) and defined contribution plans, employees who participated in both were subject to Internal Revenue Code Section 415(e) prior to its repeal. This regulation limited the combined benefit from the two types of plans, and Pension Administration determines the historical 415(e) limit in calculations for which the limit is historically effective.

Under the combined limits, the sponsor designated which plan (DB or DC) was primary. Reductions required by 415(e) were made to the non-primary plan. Typically, the DC plan was primary, so the DB plan was reduced. Because Pension Administration calculates only DB plan benefits, use the system's historical 415(e) limit functionality only if the DC plan was primary and benefits that are greater than the limit resulted in a reduction to the DB plan.

If you set up Pension Administration to calculate historical 415(e) limits, the system needs access to participants' DC information. It needs either the defined contribution fraction, calculated according to historical section 415(e), or the final historical 415(e) limits.

Historical section 415(e) limited the combined benefit from DB and DC plans. The sum of the DB fraction and the DC fraction cannot exceed 1.0.

Pension Administration calculates the DB fraction, but it cannot calculate the DC fraction. You must provide the DC fraction.

To find the DC fraction:

1. For each year that the employee contributed to DC plans, find the lesser of:

   1. DC dollar limit × 1.25.

   2. Employee's compensation × 1.4 × 0.25.

2. Add the amounts calculated in step 1. This is the DC fraction denominator.

3. Divide total contributions to DC plans by the DC fraction denominator.

Because the fraction's numerator and denominator can change annually, enter an effective date for the information that you provide. Enter a defined contribution fraction for that date.

Alternatively, you can calculate and provide the final 415(e) limit—that is, the maximum dollar benefit for the defined benefit plan allowable under historical section 415(e).

See Also

Applying Section 415 Limits

Entering an Employee's Actual Social Security Earnings History

Access the Yearly Soc Sec Earnings page (Pension, Update Regulatory Information, Yearly Soc Sec Earnings, Yearly Soc Sec Earnings).

Pension plans may incorporate social security calculations in their benefit formulas or when calculating a level income option form of payment. Because you do not normally have access to social security earnings information from other employers, you usually use assumed earnings that are determined using certain assumptions.

Sometimes, however, an employee provides their earnings history—either a document from the Social Security Administration or pay stubs from previous employers. You must use this actual earnings history, rather than the assumed earnings. Entering the actual earnings data on the Yearly Soc Sec Earnings page ensures that all social security calculations use the actual earnings. At the same time, you avoid overwriting the consolidated earnings data that you might use elsewhere for final average earnings or cash balance accounts calculations.

Social security earnings are always based on calendar years. For each year of earnings, enter the year and earnings. Amounts that exceed the maximum taxable wage base are limited to the wage base amount during the social security calculations.

Only social security calculations use these earnings. Other calculations involving earnings use the consolidated earnings that are specified in the plan rules.

Note. The system does not project or regress earnings entered on this page. Be sure to enter information only when you have a complete earnings history.

Maintaining Pension Beneficiary Data

This section provides overviews of beneficiary benefits and automatic spousal benefits, lists the page used to maintain pension beneficiary information, and discusses how to identify non-spouse pension plan beneficiaries.

Understanding Beneficiary Benefits

Many optional forms of payment for pension benefits include survivor components (that is, a continuing benefit paid to the retiree's beneficiary after the retiree dies). When the payment amount is actuarially reduced, the system bases the reduction on both the retiree's and beneficiary's ages. Therefore, accurate pension calculations depend on the availability of accurate beneficiary data.

Another important benefit for pension beneficiaries is PRSA coverage, which provides a death benefit when a plan participant dies before becoming eligible for retirement.

See Also

Maintaining PRSA Coverage

Understanding Automatic Spousal Benefits

Certain plans offer an automatic joint and survivor benefit for the spouses of plan participants. A specified percentage of the employee's monthly pension is automatically paid to the surviving spouse after the death of the employee. This benefit is independent of the employee's optional form selection. The employee's optional form selection and any resulting actuarial reduction to the benefit, therefore, apply only to the portion of the benefit that exceeds the automatic spouse benefit.

For example, Plan A specifies an automatic 25 percent benefit. Fred's benefit is 1,000 USD per month as a single life annuity, but, even if he selects a single life annuity, his wife Norma is entitled to 250 USD per month after Fred dies.

Fred can still elect any optional form, but if he chooses a joint and survivor form, the continuation percentage applies only to the 750 USD portion of the benefit that is not already dedicated to Norma. Therefore, if he elects a 50 percent joint and survivor form, the 750 USD is actuarially reduced (for example, to 700 USD), and Fred's benefit is 950 USD. After Fred dies, his joint and survivor beneficiary receives 350 USD per month. This beneficiary might be Norma, but might also be a child, a trust, or another person. If he named Norma as his beneficiary, she receives the 350 USD in addition to the automatic 250 USD, for a total benefit of 600 USD per month.

If the plan rules specify an automatic benefit, the optional forms calculations reflect the benefit.

Use the Dependent/Beneficiary component in PeopleSoft Human Resources to enter beneficiary data.

See Also

Entering Dependent and Beneficiary Information

Page Used to Maintain Pension Beneficiary Information

Identifying Non-Spouse Plan Beneficiaries

Access the Plan Beneficiaries page (Pension, Pension Information, Plan Beneficiaries, Plan Beneficiaries).

Employees can have different beneficiaries for different plans. They can also change their beneficiary over time. To enter beneficiary information, enter both an effective date and a benefit plan.

You can enter information only for plans that allow contingent (non-spouse) beneficiaries. If a plan is not available in the list of valid plans, it does not allow contingent beneficiaries.

Specify the dependent or beneficiary ID for the designated beneficiary. Only individuals already added to the employee's dependent or beneficiary list are valid beneficiaries. If the designated individual is not available in the list of valid values, use the pages in the Perform Election Entry (BAS_ELECTION_ENTRY) - Dependents/Beneficiaries page to add the person as a dependent or beneficiary. Return to the Plan Beneficiaries page to finish recording the pension beneficiary information.

See Also

Understanding Pension Plans

Entering Participant Benefit Elections