Understanding Benefit Contribution Limits

Organizations often offer employee benefit plans or benefit plan options to which employees can voluntarily contribute an amount or percentage of their salary. For example, an organization might offer a 401(k) plan that allows employees to contribute up to eight percent of their salary. The organization might also stipulate that if employees choose to participate, they must contribute a minimum of one percent. You can use the Benefit Amount Rate Edits program (P085573) to define the minimum and maximum limits for deductions, benefits, and accruals (DBAs).

To set minimum and maximum limits for a DBA, you can use the Plan Master program (P08320) to select a benefit plan. You need to review current DBAs that might be currently attached to the benefit plan and then use a Form menu option to select the Benefit Rates. When you specify the minimum and maximum amounts that the organization allows for a specific DBA, you also need to specify the frequency type. The frequency type determines how the system distributes the amount deducted from salary over a period of one year.

The system stores information that you enter in the Benefit Amount Rate Edits program in the Entered Benefit Amount/Rate Edits table (F085573W).