Setting Up Severance Payments Calculation

Page Name

Definition Name

Usage

Earnings Name Page

GP_PIN

Name the earnings element (for example, the demo data uses SEVERANCE) and define its basic parameters.

Earnings - Calculation Page

GP_ERN_DED_CALC

Define calculation rules for the earnings element. Set the Calculation Rule value to Amount, the Amount Type value to Formula - Monetary and Decimal, and the Amount Element value to CN FM SEV AVG PAY.

Earnings - Rounding/Proration Page

GP_ERN_DED_RND

Specify rounding and proration options for the components of the earnings element by selecting Use Pay Group Rounding in the Rounding Option - Resolved Amount field.

Earnings - Auto Generated Accumulators Page

GP_AUTOGEN_ACUM

Define characteristics of automatically generated accumulators for the earnings element.

Process Lists - Definition Page

GP_PROCESS

Change Process List CN PR PAYROLL and add Termination section CN SE TERMINATION, with a conditional formula CN FM TERM CHECK. This formula checks whether the employee was terminated within the current segment being processed.

Section - Section Name Page

GP_PIN

Use this page to set up the CN PR PAYROLL process list.

Section - Definition Page

GP_SECTION

For the CN PR PAYROLL process list, use this page to add the earnings element as an earnings element type.

Element Group Name Page

GP_PIN

Define the CN EG TERMINATION element group.

Element Group Members Page

GP_ELEMENT_GROUP

Insert the earnings element into the CN EG TERMINATION element group.

Eligibility Group Page

GP_ELIG_GROUP

Insert the CN EG TERMINATION element group into the K6MONTHLY eligibility group.

Array Name Page

GP_PIN

Define the Array CN AR EE JOB. This array picks up the termination job row (last row in the current segment), determining whether the action reason entered indicates that severance pay is to be calculated.

Field Map and Keys Page

GP_ARRAY_KEYS

  • Select the database table for the FROM clause of the SQL statement.

  • Define the keys and retrieval criteria for the array and the WHERE clause of the SQL statement that the system uses when retrieving data for the array.

  • Define the fields to be returned and the elements to be filled by the array. This provides the data for the SELECT clause of the SQL statement and determines the elements to resolve from this array call. You also use this page to define the sort order for retrieving rows from a database.

Accumulator Name Page

GP_PIN

Define a custom accumulator CN AC ROLLAVG SAL (no expiry, continues forever).

Based on HIRE DATE, this accumulator holds all the earnings that make up the average monthly salary.

Level Page

GP_ACCUMULATOR_1

Specify keys for the CN AC ROLLAVG SAL accumulator and indicate the timing of the accumulator's resolution.

Definition Page

GP_ACCUMULATOR_2

Define the period for the accumulator CN AC ROLLAVG SAL.

Members Page

GP_ACCUMULATOR_3

Define the list of elements that contribute to the accumulator CN AC ROLLAVG SAL.

Historical Calculation Name Page

GP_PIN

Define historical rules CN HR ROLAVG STRT and CN HR ROLAVG END.

These historical rules read the accumulator CN AC ROLLAVG SAL, starting from the previous pay period and going back a number of periods. This number can be 12 months (default value), or the number of months since the hire date, if the employee was employed fewer than 12 months). A value can also be entered as a payee supporting element override in cases in which 12 months of pay history is not available.

Processing Period Page

GP_HIST_RULE1

Define the details of the processing period for the historical rules CN HR ROLAVG STRT and CN HR ROLAVG END. Depending on what you select as the rule type, some fields may not be available for entry.

Parameters and Mapping Page

GP_HIST_RULE2

Define the formula for the historical rules CN HR ROLAVG STRT and CN HR ROLAVG END.

Date Name Page

GP_PIN

Define the start and end dates used by the historical rules.

Variable Name Page

GP_PIN

Define severance payment variables.

Definition Page

GP_VARIABLE

Define the value of a variable according to the format specified on the Variable Name page.

Formula Name Page

GP_PIN

Define severance payment formulas.

Field-by-Field Definition Page

GP_FORMULA_FLDXFLD

Define the fields to use is a severance payment formula according to the format specified on the Formula Name page.

Use demo data provided by PeopleSoft Global Payroll, along with greater background data provided in relevant topics in PeopleSoft Global Payroll to set up the severance payments calculation.

Start date = previous period:

  • CN DT ROLLAVG STRT is set from the period end date minus one month.

  • CN DT ROLAVG ST-1 is set from the begin end date minus one month.

End date = 12 months prior, or less if employee is a new hire or if a payee override is entered (CN VR NBR PERIODS).

  1. CN DT ROLLAVG END is set from the CN DT ROLLAVG STRT minus the variable CN VR NBR PERIODS that contains the number of months.

  2. CN DT ROLLAVG END -1 is set from the CN DT ROLAVG ST-1 minus the variable CN VR NBR PERIODS that contains the number of months.

Define the following severance payment variables:

Variable

Description

CN VR ROLAVG START

CN VR ROLAVG END

Values retrieved from the historical rule.

CN VR NBR PERIODS

The number of months that the historical rule will interrogate (the default is 12 months). If the employee is not a new hire, but 12 months pay results do not exist, then as part of the payroll process, this field will be set using payee overrides.

CN VR AVG SEV PAY

Holds the average severance pay. The default value is 999999.99 (rolling average calculation). This can be overwritten at payee, pay group, or pay entity to a value of 0.00 to indicate that the calculation is to be based on monthly base pay. It can be set to a specific value at payee level to indicate that the calculation is to use this value and not the base pay rolling average.

CN VR ACTION REAS

Holds the action reason from the termination job row. The array populates this variable.

CN VR TERM ACTION

This is set to the default of RED, for staff reduction. This is the action reason that will invoke severance pay. This can be overwritten at the Pay Entity/Group level.

Define the following severance payment formulas:

Formula

Description

CM FM TERM CHECK

Ensures that the termination date is within the current segment being processed. This formula checks the employee's status: Q=Retired with Pay, R=Retired, T=Terminated, U=Terminated with Pay.

CN FM SEV AVG PAY

This formula is invoked from the earning code SEVERANCE.

  • Calculates average pay for Severance.

  • Sets the variable CN VR AVG SEV PAY with specific payee value entered or base pay (MONTHLY RT) or Rolling Average (CN FM SEV AVG HIST is invoked if this is the case).

  • Severance Pay = CN VR AVG SEV PAY X Years of Service (YOS).

    YOS is rounded up to full years (no decimal). YOS is based on LAST HIRE DATE.

CN FM SEV AVG HIST

Severance Pay Historical Rule

  • This invokes the historical rules CN HR ROLAVG STRT and CN HR ROLAVG END. The historical rule interrogates the accumulator CN AC ROLLAVG SAL and returns two accumulator values—starting pay and ending pay.

  • Sets the number of months variable (CN VR NBR PERIODS) based on whether the number of months was overridden at the payee level or whether the employee is a new hire. In neither, then the default variable is 12 months.

  • Calculates the average pay variable (CN VR AVG SEV PAY) based on starting pay minus the ending pay divided by the number of periods.

    (CN VR ROLAVG START – CN VR ROLAVG END ) ÷ CN VR NBR PERIODS

    Note: If the value of this calculation is zero, then the monthly salary is used.