Maintaining Public Tables

This chapter provides overviews of public tables maintenance and effective dates and sequence numbers, and discusses how to:

• Maintain Internal Revenue Code limit tables.

• Maintain interest rate tables.

• Maintain social security tables.

Understanding Public Tables Maintenance

You set up calculation rules when you implement Pension Administration. These rules sometimes make use of certain public tables published by U.S. governmental agencies. These include tables that include information about Internal Revenue Code limits on pension benefits, interest rates, and social security.

PeopleSoft delivers these tables with data that is current when the software is released. Pension Administration also provides pages for where you can view this information, and update it when necessary.

Important! Be sure to set up the appropriate security to prevent unauthorized modification of the data in these tables.

Understanding Effective Dates and Sequence Numbers

This section provides overviews of effective dates and sequence numbers.

Effective Dates

Most of the public table pages contain the Effective Date field, and also yearly rates. For most of these tables, you never add another effective date; you simply add a new value with the same effective date.

For example, the 30-Year Treasury Bond table has the effective date January 1, 1900. Under that effective date, there are values for every month since July 1, 1994. As new values become available, simply add them under the existing effective date.

In certain cases, however, the information for a particular year does change. For example, each year the National Average Wage table includes estimates for the most recent two years. In 1998, for example, the table did not contain data for 1998. It contained estimates for 1997 and 1996, and there was final data for all prior years. The 1999 table replaced the estimate for 1996 with a final amount. Overwriting the estimate would make historical calculations invalid because a calculation for an employee who terminated in 1998 uses the rules as of 1998 and cannot use information that was not available then. Therefore, it is important to have a new effective date to preserve the historical data so that the system can use the appropriate value, depending on an employee's termination date.

When you do create a new effective date, be sure to include values for the entire date range in the table. For example, a calculation based on a 1999 retirement would only be able to access the national average wage for the years shown in the 1999 table. If that table does not have data from earlier years, the calculation is compromised.

Note. The National Average Wage table is the only one of the delivered tables that regularly requires new effective dates. Only very unusual events would require new effective dates in the other tables.

Sequence Numbers

Most of the public table pages contain the Sequence field.

When you implement Pension Administration, you use the Table Lookup utility to enable certain functions to look up information on tables. In order for you to reference a table with the Table Lookup utility, the table must conform to certain requirements. One requirement is that it contain a sequence number field, which the Table Lookup utility uses to order the rows.

If you use the tables that PeopleSoft maintains, you can ignore this field. If you maintain the data yourself, be sure to sequence the data appropriately.

See Also

Creating a Physical Table

Maintaining Internal Revenue Code Limit Tables

This section provides an overview of Internal Revenue Code limit tables and lists the pages used to maintain Internal Revenue Code limit tables.

Understanding Internal Revenue Code Limit Tables

Section 415 of the Internal Revenue Code limits a person's total pension benefit from all qualified plans. Section 401(a)(17) of the code limits the amount of annual earnings that can be used in determining a pension benefit. Pension Administration delivers the tables with the limits published by the Internal Revenue Service (IRS).

Because PeopleSoft maintains these tables, it is unlikely that you will need to edit the existing values. However, you can update the tables if you want.

Section 401(a)(17) Limits

Two tables are used for Section 401(a)(17) limits: TRA '86 and OBRA '93. This is necessary because a transition rule enabled bargained plans to use the previous limits that were in effect when OBRA (the federal Omnibus Budget Reconciliation Act) reduced the limit for non-bargained plans to 150,000 USD. As of 1997, 401(a)(17) limits are the same for bargained and non-bargained plans.

Section 415 Limits

Section 415(b) of the Internal Revenue Code specifies a monetary limit on an employee's total pension benefit from all qualified defined benefit plans. The limit was originally 90,000 USD in 1987; it has been adjusted annually to accommodate the increase in the cost of living.

Prior to its repeal, section 415(e) of the Internal Revenue Code limited the combined benefits from all defined benefit and defined contribution plans. If you sponsor a defined contribution plan, this historical limit may still apply to employees who participate in both plans. To determine whether this is so, you must compute an employee's defined contribution fraction. One of the components needed to determine this fraction is the IRS's published limits for defined contribution plans. Although Pension Administration does not calculate the defined contribution fraction, PeopleSoft provides a table of defined contribution limits for your information.

Note. Section 415(e) is no longer in effect as of January 1, 2000.

Pages Used to Maintain Internal Revenue Code Limit Tables

See Also

Applying Section 401(a)(17) Earnings Limits

Applying Section 415 Limits

Maintaining Interest Rate Tables

This section provides an overview of interest rate tables, lists the pages used to maintain interest rates, and discusses how to:

• View PBGC (Pension Benefit Guaranty Corporation) interest rates.

• View 30-year treasury bond rates.

• View federal midterm rates

• View segment rates.

Understanding Interest Rate Tables

Several components of pension calculations use interest rates.

Table Lookups for Interest Rates

When you need an interest rate, you have the option to find it using a table lookup.

You can use the Interest Method pages to create interest rules that you reference in the cash balance accounts and employee accounts functions. When you define an interest method, a table lookup is one of the options for the rate source.

You also use an interest rate lookup when you set up an employee-paid benefit definition. This function uses the interest rate to project the value of an employee account and determine what portion of the employee's total benefit is attributable to employee contributions.

Actuarial assumption sets can also use interest rate lookups to determine the interest basis for actuarial calculations.

Pension Administration provides three interest rate tables that you can use with the Table Lookup utility: PBGC rates, published by the Pension Benefit Guaranty Corporation, 30-year treasury bond rates, and federal midterm rates. Although PeopleSoft does not provide you with table lookup aliases for any of the delivered interest rate tables, table lookup aliases can be used with any of the tables except the segment rates. You need to create table lookup aliases for the interest rate tables that you actually use.

Segment Rates

Pension Administration provides one additional interest rate table, segment rates, that you reference directly rather than through the Table Lookup utility. Segment rates differ from the other interest rate tables because there are separate rates to use over different time periods.

You reference segment rates only from the Interest Basis page in the Actuarial Assumptions component. Only one segment rates table exists, so all you need to do is indicate that the assumption set uses segment rates, and the system automatically uses the correct table.

Pages Used to Maintain Interest Rates

Viewing PBGC Interest Rates

Access the PBGC Rates page (Set Up HRMS, Product Related, Pension, Calculation Tables, PBGC Rates, PBGC Rates).

Each row contains the PBGC immediate rate for a particular valuation date. The immediate rate is the basis for the PBGC grading structure, which uses a set formula to derive three additional rates from the immediate rate. An additional rate is applied over the period of time between the valuation date and the deferral date, the date when payments actually commence.

When you set up the plan rules, two pages offer the option to use PBGC grading: Actuarial Assumptions (ACTUARIAL_FACTORS) - Interest Basis and Components (PA_EEBENEFIT_P1) - Employee Pd Benefit 2 of 2. Although you can apply the grading to any rate, you normally use published PBGC rates any time that you grade the rates.

See Also

Establishing Actuarial Assumption Sets

Defining Employee-Paid Benefits

Viewing 30-Year Treasury Bond Rates

Access the 30 Year T-Bond Rates page (Set Up HRMS, Product Related, Pension, Calculation Tables, 30 Year T-Bond Rates, 30 Year T-Bond Rates).

Note. The Internal Revenue Service publishes 30-year treasury bond rates. These are the average yields on 30-year treasury constant maturities for a given month. These rates are used to determine the present lump sum value of a participant's benefit under a qualified defined benefit plan.

Each effective-dated row contains a date and the 30-year Treasury bond monthly rate that was published on that date.

Viewing Federal Midterm Rates

Access the Federal Midterm Rates page (Set Up HRMS, Product Related, Pension, Calculation Tables, Federal Midterm Rates, Federal Midterm Rates).

Defined benefit plans that require employee contributions must credit interest to those contributions using the applicable federal rates (AFR), commonly called the federal midterm rates. The rate used is 120 percent of the annual AFR for the month in which the plan year commences.

Each effective-dated row contains a date and the rate that is 120 percent of the applicable federal rate for that date. This is an annualized rate.

Viewing Segment Rates

Access the Segment Rates page (Set Up HRMS, Product Related, Pension, Calculation Tables, Segment Rates, Segment Rates).

The Pension Protection Act of 2006 contains provisions for using certain interests rates in the actuarial assumptions that you use to calculate the minimum value of a lump sum distribution and to calculate the lump sum equivalent of a straight life annuity for purposes of Section 415(b).

These interest rates are called segment rates. The Treasury department publishes these segment rates monthly.

Rates

Maintaining Social Security Tables

This section provides an overview of social security tables maintenance, lists the pages used to maintain social security tables, and discusses how to:

• View national average wages.

• View consumer price index data.

• View delayed retirement credits.

• View disability drop years.

Understanding Social Security Tables Maintenance

Social security calculations use a number of tables published annually by the Social Security Administration. PeopleSoft delivers and maintains five social security tables.

The pages in this section display the information in these tables. Because PeopleSoft maintains this information, it is unlikely that you will need to edit it. However, if you choose, you can enter new values as they become available.

See Also

Defining Social Security

Pages Used to Maintain Social Security Tables

Viewing National Average Wages

Access the National Average Wage page (Set Up HRMS, Product Related, Pension, Calculation Tables, National Average Wage, National Average Wage).

Each effective-dated row consists of a year and the associated national average wage.

When the Department of Labor publishes these values, final information for the previous two years is only available as estimates. For example, in 1998, there was no data for 1998, there were estimates for 1997 and 1996, and there was final data for all prior years. In 1999, the estimated average wage for 1996 is replaced with a final amount. Overwriting the estimate would make historical calculations invalid because a calculation for an employee who terminated in 1998 uses the rules as of 1998. It cannot use information that was not available then. Therefore, a new effective-dated table is added every year, and both the estimate and the final value are available when needed.

The two estimates are marked Assumed and are known as the "lag years."

On the Social Security - Earnings Basis page, you can use the Lag Year Regression Method to specify how to treat lag year data in social security calculations.

Viewing Consumer Price Index Data

Access the Consumer Price Index (CPI-W) page (Set Up HRMS, Product Related, Pension, Calculation Tables, Consumer Price Index (CPI-W), Consumer Price Index (CPI-W)).

When the system calculates social security benefits, it uses the Consumer Price Index (CPI) to incorporate annual cost of living adjustments between the year of eligibility and the year the social security benefits are assumed to commence.

The Social Security Act requires that the cost of living increase be based on the CPI for urban wage earners and clerical workers for the quarter ending each September 30 (the average for the months of July, August, and September).

Each effective-dated row contains a year and the associated CPI increase rate.

Viewing Delayed Retirement Credits

Access the Delayed Retirement Credit page (Set Up HRMS, Product Related, Pension, Calculation Tables, Delayed Retirement Credit, Delayed Retirement Credit).

Each row consists of a lowest year, a highest year, and the associated delayed credit percent for that range.

Note. Each delayed credit value applies to a specified range of years. This display format is slightly different from the previous tables, which show only one value for each individual year.

If you edit this table, be sure not to set up overlapping rows. For example, if you set up rows for 1980-1990 and 1990-2000, there are two rows for 1990.

Viewing Disability Drop Years

Access the Disability Drop Years page (Set Up HRMS, Product Related, Pension, Calculation Tables, Disability Drop Years, Disability Drop Years).

Each row consists of a lowest age, a highest age, and the associated disability drop number. The disability drop number is the number of years to drop for employees becoming disabled within that age range.

Note. Be sure not to set up overlapping rows. For example, if you set up rows for 37-41 and 41-46, there are two rows for age 41.