Modifying and Updating Delivered Repayment Deductions

Page Name

Definition Name

Usage

Calculation Page

GP_ERN_DED_CALC

Associate a generation control element with a deduction.

Generation Control Page

GP_CALENDAR3

Associate a calendar with a frequency factor for generation control.

Request Repayments USA Page

GPUS_LOAN_PYE

Assign a repayment and specify its limits.

This topic discusses:

  • Deduction schedules.

  • Limit processing.

Deduction Schedules

The LOAN deduction is set up to be processed in every pay period, in the first segment only, using the generation control element GP APPLY 1ST SEG. You can use other delivered generation control elements, or create generation controls of your own, to limit processing of this deduction based on a range of criteria.

Note: The LOAN deduction is defined with a frequency option of Use Calendar Period Frequency. This means that the system views any amount you enter for a loan as a pay period amount.

The delivered generation controls are:

Generation Control Element

Frequency Factor

Description

GEN GC WEEK 1AND2

FRST ONLY (12)

Schedules the deduction during the first pay period in the month (for biweekly and semimonthly pay periods).

GEN GC WEEK 3AND4

SCND ONLY (12)

Schedules the deduction during the second pay period in the month (for biweekly and semimonthly pay periods).

GEN GC WEEK 1AND2

FRST SCND (24)

Schedules the deduction during the first and second pay periods in the month (for weekly pay periods).

GEN GC WEEK 3AND4

THRD FRTH (24)

Schedules the deduction during the third and fourth pay periods in the month (for weekly pay periods).

Note: These elements are discussed in detail in the topic Setting Up General Deductions.

See Understanding Deduction Schedules.

Limit Processing

To define a loan, you must define and update the deduction limit, the per-period repayment amount, and any additional loan repayments.

Note: The deduction limit is equal to the original amount of the loan. It is stored in the variable LNS VR GOAL AMT.

To ensure that total loan repayments do not exceed the limit, the LOAN deduction uses the post-process formula LNS FM PYMTS.

This formula calculates the current amount of the deduction based on the termination status of the loan recipient:

  1. If the loan recipient has a termination status of 1 (YES), the formula calculates the current amount of the loan as the goal amount (LNS VR GOAL AMT) less the amount paid to date (LOAN PAYMENT) less any outstanding arrears (LOAN ARR).

  2. If the recipient's termination status is 0 (NO), the formula adds the current deduction amount (CURR AMT VAL) to the amount paid to date (LOAN PAYMENT) and any arrears amount (LOAN ARR), and compares this sum to the goal amount (LNS VR GOAL AMT).

    1. If this sum is less than the goal amount, no limits are applied and the loan is processed based on the current deduction schedule.

    2. If this sum is greater than the goal amount, the system calculates the current amount of the loan as the goal amount less the amount paid to date less the arrears payback.

For example, assume that a payee has a goal amount (LNS VR GOAL AMT) of 1000 USD, and that he has paid 900 USD (LOAN PAYMENT) towards the goal. Based on the current deduction schedule, the system deducts 200 USD each pay period. In addition, the payee has 50 USD in arrears.

When processing the deduction, the post-process formula:

  1. Determines whether the payee has been terminated (NO).

  2. Determines whether LOAN AMOUNT (900.00) + LOAN_ARR (50.00) + CURR AMT VAL (200.00) > LNS VR GOAL AMT (1,000.00) (YES).

  3. Calculates the deductions as LNS VR GOAL AMT (1,000.00) − LOAN PAYMENT (900.00) − LOAN_ARR (50.00) = OVRD CURR AMT VAL (50.00).

The LOAN AD PYMT deduction uses the post-process formula LNS FM ADD PYMT to perform limit testing. However, instead of reducing the deduction if an unscheduled payment causes the goal amount to be exceeded, the formula generates a message warning that the payee has overpaid the loan.

To modify deduction schedules:

  1. Associate the appropriate generation control element with the LOAN deduction at the element level.

    For example, associate the delivered generation control GEN GC WEEK 1AND2 with the deduction (LOAN) on the Calculation page of the Deduction Definition component.

    Note: The LOAN AD PYMT deduction is for additional, unscheduled loan repayments. For this reason, you will likely not want to assign a generation control frequency to it.

  2. Associate the calendar you are processing with the frequency factor of the generation control element you have selected.

    Do this on the Generation Control page of the Calendar component.

    For example, if you process payees weekly and have scheduled a loan to be deducted in the first and second week of each month (using the generation control element GEN GC WEEK 1AND2), associate the first and second calendar you process every month with the frequency factor FRST SCND. The generation control element triggers the deduction when the frequency factor associated with the calendar is identical to the frequency factor of the deduction.

To update deduction limits:

  1. Access the Request Repayments USA page.

  2. Assign the repayment deduction to a payee.

  3. Enter the total amount of the repayment in the Total Amount field.

    This amount represents the deduction limit.