Understanding Service Purchase

This topic provides overviews of:

  • Service purchase administration

  • The Lifecycle of a Service Purchase Transaction

You use three components to administer a service purchase transaction:

  • Verify Employment History

  • Select Purchasable Service

  • Purchase Service

Verify Employment History

Use the Verify Employment History component to gather information regarding employment history that is not in the system. The verification status tracks the process of gathering and verifying this information. When all applicable documentation is acquired from the employee, set the status to Verified. Verified employment history can be referenced when you identify a service period for purchase.

Select Purchasable Service

Begin a service purchase transaction by identifying the purchasable service in the Select Purchasable Service component. In this component, you can select:

  • Periods of leave that have been recorded for an employee in the system.

  • Instances of withdrawn contributions for an employee.

  • Periods of leave that are not in the HR system but that have been entered in the Verify Employment History component.

When the service to be purchased is identified, you can create an estimate for that purchase. Creating an estimate creates a service purchase record and transfers you to the Purchase Service component, where you can complete the estimate and manage the service purchase process.

Purchase Service

Use the Purchase Service component to create purchase estimates based on parameters that you supply. You can vary the amount of service to be purchased, recalculate the cost, calculate the benefit with or without the purchased service, and model various payment options.

After the employee is satisfied with the estimate, you submit the transaction, acquire any necessary approvals, and finalize the employee’s election to purchase the service.

If you integrate with PeopleSoft Receivables, the system updates the status of the service purchase as it tracks the progress of the payments.

The lifecycle of a service purchase transaction is represented by the statuses described in the following table.

Status

Valid Successors

Description and Associated Processing

Estimate

  • Submitted

  • Canceled

The system assigns the Estimate status when you initially create a service purchase transaction. This status remains in effect while you model different purchase options and send information to the employee. This is the only status that allows you to modify data on the Purchase Service page.

Submitted

  • Validated

  • Agreement Sent

  • Approved

  • Canceled

  • Expired (only if set by system)

When the employee chooses to move forward with a specific estimate, the pension administrator identifies the estimate to submit and changes the status to Submitted.

When the status changes to Submitted, the system:

  • Sets the expiration date for the service purchase agreement.

  • Assigns the employee account for the purchase.

    Configuration options determine which employee account is used, but if an employee enters into more than one purchase arrangement that uses that account, the system automatically uses an account with the same name and a numeric suffix.

  • Displays the Create Purchase Agreement button.

  • Requests a PeopleSoft Receivables customer ID for the employee (If integration with PeopleSoft Receivables is active).

Validated

  • Approved

  • Agreement Sent

  • Elected

  • Canceled

  • Expired (only if set by system)

When a pension administrator has reviewed the service purchase transaction verified the data, the administrator can change the status to Validated.

Approved

  • Agreement Sent

  • Elected

  • Canceled

  • Expired (only if set by system)

If your organization requires approvals before sending the employee a service purchase agreement or allowing the employee to purchase the service, assign the Approved status when the approval process is complete. The date that you change the status to Approved is saved to the Approval Date field on the Purchase Service page.

Other than tracking approval with this status and status date, the pension system does not provide approval-related processing.

Agreement Sent

  • Elected

  • Canceled

  • Expired (only if set by system)

The pension administrator changes the status to Agreement Sent after sending the employee a service purchase agreement. The agreement can be generated from the Purchase Service page after the transaction is submitted.

Elected

  • Receiving Payments

  • Canceled (if allowed in the payment options configuration)

The pension administrator changes the status to Elected after the employee accepts the service purchase agreement.

When the status changes to Elected, the system:

  • Creates employee account adjustments to establish the employee account balance.

  • Runs periodic processes to post the adjustments.

  • Retrieves the PeopleSoft Receivables customer ID for the employee.

  • Sends a message to PeopleSoft Receivables to generate the open items.

  • Make the View Payments link visible on the Purchase Service page.

If any of these actions cannot be performed, the error messages are logged and the service purchase transaction status reverts to its previous value.

Receiving Payments

  • Canceled (if allowed in the payment options configuration)

  • Error (only if set by system)

  • Complete (only if set by system)

When PeopleSoft Receivables creates the last open item successfully, the system changes the status from Elected to Receiving Payments

The pension administrator can set make this status change manually if the employee is making payments through payroll deductions.

Error

Receiving Payments

If PeopleSoft Receivables is unable to set up payment processing for a service purchase that has been elected, it changes the status from Receiving Payments to Error. After the error is resolved, a pension administrator manually changes the status back to Receiving Payments

Complete

None

When the employee account balance reaches zero (within the tolerance amount specified on the Service Purchase Configuration - Parameters Page), the system sets the transaction status to Complete and no further status changes are allowed.

Canceled

None

The pension administrator can cancel a service purchase any time before the status is Elected. After that, the availability of the Canceled status depends on whether the Allow Cancellations check box on the Service Purchase Configuration - Payment Options Page is selected.

When the status changes to Canceled the system:

  • Sends a message to PeopleSoft Receivables to cancel any remaining open items.

    If a refund is to be issued, the system sends an additional message with this information.

  • Creates account adjustments to close out the service purchase employee account.

  • Runs periodic processes to post the account balance adjustments.

Expired

None

The system sets this status if a user accesses an expired service purchase transaction in Submitted, Validated, Approved, or Agreement Sent status. The transaction expires on the expiration date that is set when the transaction is submitted.