Understanding Grouping

A pension plan can include unique provisions for different subsets of your employee population. There might be different rules for:

Salaried and hourly employees.
Employees in different unions.
Employees who were covered under an acquired company's plan.

A critical step in implementing your plan rules is applying the rules to the appropriate groups. Use custom statements to specify criteria to define each group. The group definitions can be shared among plans and function results.

You can set up group precedence to establish a method for handling situations when an employee falls into more than one group. The precedence is specific to each function result, so you can set up different precedence orders for different areas of your plan.

Periodic processing can use group definitions to determine which employees to process in a particular job.

Groups are extremely important to implementing your plan rules. Group membership controls which rules are used at every step of the calculation. Consider the following examples, which illustrate the power of this feature.

Time-Based Grouping

When you grandfather rules, you set up time-based groups to identify employees who qualify for the grandfathered benefit. For example, in 1970 you changed your plan rules from five-year cliff vesting to seven-year step vesting:

Group Criteria	Vesting Definition
Hire date is before 1970	Better of five-year cliff vesting and seven-year step vesting
Hire date is 1970 and after	Seven-year step vesting

Grouping with Benefit Eligibility

You only want to calculate the reduced benefit amount for employees who are eligible for early retirement:

Group Criteria	Benefit Formula Definition
Early retirement eligibility is yes	Unreduced benefit times early retirement factor

Note: There's no group for employees who are not eligible. Those employees will bypass this function result. Therefore, you need to be very careful that no other function result down the line looks for the missing results.

Grouping with Service

Your cash balance account credits vary with service:

Group Criteria	Cash Balance Definition
Service is less than 10 years	Credit 5 percent of salary
Service is greater than 10 years	Credit 6 percent of salary

Grouping with Vesting

Vested employees use different break-in-service rules from unvested employees:

Group Criteria	Service & Break Definition
Vesting equals 0 percent	Use rule of parity to determine if prior service is restored.
Vesting greater than 0 percent	Always restore previous service.

Grouping Based on Job

You negotiate different unreduced early retirement criteria with different unions:

Group Criteria	Benefit Eligibility Definition
Union Code = 81	Age 60 or 30 years of service
Union Code = 82	Age 60

Grouping Based on Employee Type

Full-time employees use elapsed time service. Part-time employees use hours counting service:

Group Criteria	Service Definition
Employee Status is F	Elapsed time service
Employee Status is P	Hours counting service

Grouping Based on Calculation Reason

Death benefits have a different (reduced) set of optional forms from regular retirement benefits:

Group Criteria	Optional Forms Definition
Calc Reason Code is termination or disability	Full set of optional forms
Calc Reason Code is death	No joint and survivor forms allowed

Calculate social security benefits differently for old age retirement and disability retirement:

Group Criteria	Social Security Definition
Calc Reason Code is disability	Calculate social security disability benefits.
Calc Reason Code is not disability	Calculate social security old age benefits.

Grouping Based on Payee

Qualified Domestic Relations Order (QDRO) calculations are based on an amount entered into the system by the administrator. The calculation then runs the early and late retirement factors and optional forms of payment functions to apply any early retirement reduction and produce optional form choices. These two functions, therefore, may need QDRO-specific definitions:

Group Criteria	Optional Forms of Payment Definition
Regular employees	Full set of optional forms
QDRO alternate payees	No forms with survivor benefits

Group Criteria	Early and Late Retirement Factors Definition
Regular employees	6 percent reduction for each early year between employee's age 65 and 60 Note: Employee ID is used to kick off the calculation.
QDRO alternate payees	6 percent reduction for each early between the original employee's age 65 and 60 Note: QDRO ID is used to kick off the calculation. The original employee is the former spouse.