Understanding Function Results

Pension Administration uses 19 core functions, including three consolidation processes, to determine benefits. Using the core function pages, you set up methods (also called definitions) for calculating particular portions of a benefit.

Function results are the final calculation element that you build in order to apply your definitions to specific employees at specific times. In a function result, there are three types of information attached to a definition: effective dates, groups, and time segments.

Effective Dates

Effective dates enable you to track changes to your rules over time. For example, suppose your plan rules for vesting were originally effective January 1, 1990, and then the rules changed as of July 1, 2007. You then would have two effective dates for your vesting rules: the first set with the original vesting definition effective-dated January 1, 1990, and the second set with the new vesting definition effective July 1, 2007.

Groups

Groups enable you to apply different definitions to different people. The following are examples of grouping criteria:

  • Hire date: Employees hired before a particular date receive a grandfathered benefit not available to employees hired after that date.

  • Job data: Union negotiations result in different benefits for employees in different unions or in different locations.

  • Service: Employees with more service get more generous cash balance credits, interest rates, early retirement factors, or other benefits.

  • Benefit eligibility: Normal retirement, early retirement, disability retirement, and death retirement benefits vary.

  • Payee type: QDRO alternate payees require differently structured calculations.

Time Segments

Time segments enable you to apply different definitions at different points in an employee's career. This only applies to functions that can apply different rules at different times. For example, if you use an hours counting service method until January 1, 1990 and an elapsed time method subsequently, you do not recalculate service prior to 1990 with the new method. Instead, you use the earlier method for any time worked prior to January 1, 1990 and the later method for time worked January 1, 1990 and after. You then add the two separately-calculated segments to arrive at the total service.

Eight functions use time segments:

  • Consolidated earnings

  • Consolidated hours

  • Consolidated contributions

  • Service

  • Cash balance accounts

  • Employee accounts

  • Death coverage factors

  • Participation