Understanding Lump Sum Credits

You can provide employer credits in a lump sum amount that has been determined based on factors such as length of service, or a lump sum amount that is the same for all employees. You can also award credits at the plan level for selection of less-costly benefit plans.

When you provide a lump sum of employer credits, you must set up a lump sum credit category and plan within each benefit group that offers a lump sum credit. The lump sum credit plan is the mechanism for awarding the lump sum credit. The lump sum credit is awarded through either a benefit or accrual DBA.

The lump sum credit category and plan do not appear on self service forms because employees cannot change their enrollment in this plan.

The lump sum credit plan must be set up as a mandatory plan so that all employees are automatically enrolled in the plan.