Understanding Employee Accounts

Employee accounts tracks periodic—annual or monthly—contributions that employees contribute to their pension funds through paycheck deductions. They also track interest amounts and a running balance.

Sometimes activity in an employee account affects service, particularly for public plans. This can occur when employees:

• Withdraw contributions and forfeit the corresponding service—typically at termination.

• Repay the withdrawn contributions and "buy back" the service originally forfeited—typically after a rehire.

• Make contributions for times when they were not accruing service and thus "purchase" service credit for that time—typically when a person was employed but not eligible for the plan.

  Plans may also enable employees to purchase service for time spent on military leaves or other qualified leaves.

To link withdrawals, repayments, and service purchase contributions to both an employee account and the corresponding service accrual, you use subaccounts. Every transaction in a subaccount rolls up to the parent account (the plan's actual contributory account). Additionally, transactions in subaccounts trigger appropriate adjustments to the corresponding service.