Understanding Stock Purchase Plan Setup
This section lists prerequisites and provides an overview of stock purchase plan setup.
Before you begin to set up your stock purchase plans:
Review and decide how your stock administration application integrates with other HCM applications. Specific steps you should take are:
Have your benefits administrator establish a stock purchase benefit plan ID. If you offer more than one stock purchase plan, for example a domestic plan and an international plan, define an individual benefit plan for each.
Have your benefits administrator establish a stock purchase savings plan.
If you use Payroll for North America, have your payroll administrator set up payroll for processing stock purchase contributions by setting up deductions.
Define your stock administration business rules, then set up the tables that are common to, and used by, both stock purchase and stock option plans. Specific steps you should take are:
Establish the Section 423 rules using the Governing Body Rules - Stock Purchase Rules page.
Define Fair Market Values (FMV) using the FMV Method Table page.
Set up earning codes using the Stock Details - Stock Purchases page.
Set up the stock purchase plans and allocate funds using the Stock Plan Table - General page.
Define blackout periods using the Stock Blackout page.
Set up the stock exchange using the Stock Exchange Table - General page.
Set up the transfer agents and escrow agents using the Transfer/Escrow Agency - General page.
Set up the stock brokerages and stock branches using the Brokerage Table page, the Brokerage/Branch Table page, and the Stock Branch Table - General page.
Set up process groups to use for background processing with the Process Group page.
Set up issuance instructions using the Maintain Issuance Instructions page.
Indicate your insiders using the Insider Data page.
Specify the daily prices using the Daily Prices Tracking page.
When you set up a stock purchase plan, you specify the basic building blocks that control how your plan works, including linking your stock purchase plan to an existing benefit plan, selecting fair market value methods, defining offering and purchase limits, defining purchase and contribution rules, and specifying disposition restrictions. Next, you define the rules specific to your offering and purchase periods, such as grant dates and purchase periods, and establish how contributions are deducted from payroll.
Depending on how your organization administers its stock purchase plans, the majority of this setup phase is a one-time event requiring periodic maintenance on your part.
To set up a stock purchase plan:
Define rules for the stock purchase plan.
In this step, you link the stock purchase plan to a benefit plan, select the fair market value methods to use, specify limits for the offering and purchase periods, and define rules for purchases, contributions, and dispositions.
Define the offering periods and the purchase periods for the stock purchase plan.
Here, you define the range of dates in which a stock purchase offering is valid, the grant dates for an offering period, and the purchase period range of dates.
Define the reasons for holding a participant's purchase.
Define stock purchase processing messages.
Define the details of the stock purchase, including the process groups, currency conversions, and other processing parameters.