Administrative Processes

After setting up your employee data and plan rules, you can start using Pension Administration to help with ongoing administrative processes.

Pension Administration is far more than a pension calculator. The system supports a broad range of processes necessary for day-to-day and periodic business needs.

A pension is often based on the entire work history of an individual. This could be as much as 30, 40, or even 50 years. Many things can happen over such a period of time. People get raises, change work schedules, marry, divorce, name beneficiaries, change beneficiaries, take death coverage, cancel death coverage, go on disability, come off disability, retire, and die.

With Pension Administration, pension data is always available. Data is readily available to verify tax elections, update beneficiary information, or view the information that affects plan participants. The employee data pages are a useful tool for employee retirement counseling. When employees have questions about their earnings or service history, you can use these pages to review the data with them.

Pension Administration provides pages for maintaining certain pension-specific employee information (some of it used in pension calculations) that the basic human resources records do not necessarily include.

The Identify Pension Status page enables viewing and maintaining employee pension statuses for each plan. For the most part, these statuses are automatically maintained, but in some cases—notably when an employee retires or dies—the information must be manually updated.

The Update Employee Plan Data component includes several pages for entering employee pension information:

• The Cash Balance Adjustments, Employee Account Adjustments, and Service Adjustments pages enable making manual adjustments to each type of accrual.

• The Prior Plan History page enables entering information about minimum plan benefits based on amounts accrued under prior rules or under a prior plan, such as a plan sponsored by a company that you have acquired.

  The calculation does not automatically apply these minimum benefits, but it produces a message on the calculation worksheet if any result is less than a stored minimum. Although you typically load both startup data and prior plan data as part of the initial data conversion, if necessary you can use these pages to view and maintain the data.

• Use the Startup History page to enter opening balances that were in effect before you implemented Pension Administration.

• Use the PRSA Coverage page to record employees' coverage under a plan's Preretirement Survivor Annuity (PRSA).

  This is death coverage that provides a benefit to the surviving spouse if an employee dies before retiring. You only need to record this information if you charge employees for this coverage.

Use the 415(e) Limit page to track information needed to calculate Internal Revenue Code (IRC) Section 415 limits for employees who participate in both defined contribution and defined benefit plans.

For these employees, data entered on this page signals the system to ignore the 415(b) limit minimum that applies only to defined contribution non-participants. It is also used to determine the historical 415(e) limit in calculations for which the limit is historically effective. Although legislation has repealed IRC Section 415(e), it is still applicable to calculations with certain historical benefit commencement dates.

Because PeopleSoft HCM does not support the administration of defined contribution plans, you need to get the information for the historical 415(e) calculation from an outside source and enter it into the system.

The 415 function needs to know the "historical defined contribution fraction," a number calculated according to specific historical IRS rules. However, you can use any non-zero value to indicate an employee's participation in a defined contribution plan.

Use the Review Consolidation Results pages to view the calculated results of Pension Administration's consolidation process. This is the process that gathers payroll earnings, hours, and contributions into monthly or yearly accumulations. You can also override the information, if necessary.

Use the Social Security Earnings page to enter career earnings information that employees provide, enabling you to perform more accurate social security calculations.

Use the Plan Beneficiaries page to track employees' pension beneficiaries. You only use this page for recording beneficiaries who are not spouses. If you do not enter data on this page, the system assumes that a beneficiary is a spouse.

Administering contributory plans involves the following administrative tasks:

• You work with the benefits and payroll departments to ensure that the correct deductions, mandatory and voluntary, are taken out of employee's paychecks.

• When contributing employees terminate, you may need to refund contributions.

  If these employees are rehired, you may need to administer any service buyback program available to employees who repay the withdrawn contributions.

• If the plan offers a service purchase program, you need to establish purchasable service, track payments, and credit both the employees' contributory accounts and service accounts as payments are made.

Pension Administration enables creating checklists for recording and tracking administrative activities. These "activity lists" help you manage the tasks, forms, verifications, waivers, elections, and other paperwork required.