General Proration Factor Calculation

The proration factor is a number that expresses the portion of the payout period for which an individual was an eligible plan member. The highest proration factor is 1, which means that the individual was eligible for the entire payout period.

The Determine Eligibility proration process calculates eligibility and the proration factor. The Calculate Awards process uses the proration factor in awards calculation. Before you calculate awards, ensure that you have calculated proration for the entire plan payout period.

Terms and Elements

These terms are important for understanding proration calculation.

Term Definition

Payout Period

The time period of a payout. It is defined for the plan by begin and end dates on the Plan Payout Periods page.

Prorate Period

A subset of the plan payout period that is used for proration. The Eligibility/Proration process tests a worker's eligibility as of each proration period end date.

Eligibility Evaluation Period

The time period of the eligibility/proration calculation. Define begin and end dates on the run control page.

Basic Proration Factor Calculation Process

To calculate the proration factor:

  1. Select Calculate Proration on the Plan Business Rules page.

  2. Set up proration-related control tables.

    • Set up workday rules on the Workday Schedule page (for the workday schedule calculation method).

    • Set up proration percentage rules on the Percentage Proration Rules page (for the proration percentage calculation method).

    • Set up proration periods on the Prorate Periods page (for all prorated plans).

  3. Define the begin and end dates of the eligibility evaluation period on the Determine Eligibility run control page.

  4. Run the process to calculate eligibility based on whether the worker is eligible as of the end date of each of the proration periods evaluated.

    Each time you run the process, it calculates the cumulative eligibility proration factor for each member from the begin date of the plan payout period through the eligibility evaluation end date.

    The system displays the proration factor on the Eligible Employees by Plan or Eligible Employees by Group pages and on the Award Details section of the Allocate Awards page.