Setup Steps for Annuitant Processing

These are the setup steps to ensure proper calculation and interfacing of annuity offsets in annuitant processing:

1. Set up the annuity pre-offset earnings code.

2. Set up the annuity offset earnings code.

3. Set up an annuitant pay group.

4. Set up retirement contributions.

5. Set up the Thrift Savings Plan (TSP).

6. Set up the job record.

7. Set up the employee's additional pay.

Setting Up the Annuity Pre-Offset Earnings Code

Annuitant employees are paid using two hourly rates, pre-offset job rate and the offset annuitant rate. Two earning codes are used to create the paysheet with two paylines, one with each hourly rate.

The pre-offset job earnings code is configured to populate the paysheet with the job rate. The paysheet earnings line with the pre-offset rate is used to calculate and pay premium earnings.

An annuity pre-offset earnings code has the following characteristics:

• Does not add to gross pay.

• Is not subject to any taxes.

• Is calculated before the off-set earnings code.

• Adds to retirement and Thrift Savings Plan (TSP).

To set up the annuity pre-offset earnings code:

1. Add the earnings code to the Earnings Table.

   Navigation: Setup HCM, and then Product Related, and then Payroll for North America, and then Compensation and Earnings, and then Earnings Table

2. On the General page, select the Either Hours or Amount OK in the Payment Type group box, and None in the Effect on FLSA group box.

3. On the Taxes page, because the code is not used to pay regular earnings, select only the Maintain Earnings Balances in the Earnings group box (deselect all other check boxes in that group box), and deselect all check boxes in the U.S. Only group box.

4. On the Calculation page, because the earnings is the first of the two to be calculated, enter an Earnings Calc Sequence that is lower than the sequence for the offset earnings codes, and enter a Multiplication Factor of 1.0000.

5. On the Special Process page, add special accumulator for Retirement and Thrift Savings Plan (TSP) earnings.

See Establishing Earnings Codes.

Setting Up the Annuity Offset Earnings Code

The offset earnings code populates the paysheet with the offset rate and is used to calculate and pay regular earnings.

An annuity offset earnings code has the following characteristics:

• Does add to gross pay.

• Is subject to taxes.

• Is calculated after the pre-offset earnings code.

• Adds to retirement and Thrift Savings Plan (TSP) special.

To set up the annuity offset earnings code:

1. Add the earnings code to the Earnings Table.

   Navigation: Setup HCM, and then Product Related, and then Payroll for North America, and then Compensation and Earnings, and then Earnings Table

2. On the General page, select the Either Hours or Amount OK in the Payment Type group box, and None in the Effect on FLSA group box.

3. On the Taxes page, select the Add to Gross Pay, Maintain Earnings Balance, and Hours Only (Reduce from Regular Pay) check boxes in the Earnings group box, and select all check boxes in the U.S. Only group box.

4. On the Calculation page, enter an Earnings Calc Sequence that is higher than the sequence for the offset earnings codes, and enter a Multiplication Factor of 1.0000.

5. On the Special Process page, add special accumulator for Retirement and Thrift Savings Plan (TSP) earnings.

See Establishing Earnings Codes.

Setting Up an Annuitant Pay Group

To manage the unique features of annuitant employees, create a separate pay group.

An annuitant pay group has the following characteristics:

• Employee type is Exception Hourly.

• The regular earnings code (REG) that is used for employees, is not used for annuitants.

To set up an annuitant pay group:

1. Add the pay group code to the Pay Group Table.

   Navigation: Setup HCM, and then Product Related, and then Payroll for North America, and then Payroll Processing Controls, and then Pay Group Table

2. On the Definition page, enter a description for the pay group, for example Annuitant Processing Group, and in the Employee Type Default field, enter Exception Hourly to create a paysheet with standard hours and the job hourly rate.

3. On the Process Control page, in the Employee Type(s) for Pay Group group box, enter the Employee Type of Excep Hrly (exception hourly) and deselect all check boxes.

4. On the Calc Parameters page, in the Earnings group box, enter the pre-offset earnings code in both the Regular Hours and Regular Earnings fields.

See PeopleSoft HCM Application Fundamentals, Application Fundamentals: Setting Up Pay Groups.

Setting Up Retirement Contributions

Annuitant employees receiving benefits from FERS (Federal Employees Retirement System) must continue to make contributions while employed. Civil Service Retirement System (CSRS) annuitant employees have the option to contribute.

Retirement contributions have the following characteristics:

• Retirement plans use a special accumulator to calculate eligible earnings. Both the pre-offset and offset earning codes add to the retirement special accumulator.

• Annuitant employee withholdings and employer contributions are calculated on pre-offset earnings during payroll and reported on the Retirement and Insurance Transfer System (RITS).

To set up an retirement contributions:

1. Access the Base Benefits, Retirement Plan Table.

   Navigation: Setup HCM, and then Product Related, and then Base Benefits, and then Plan Attributes, and then Retirement Plan Table

2. On the Retirement Plan Table page, in the Use Special Accumulator Instead of Gross field, enter the special accumulator code that defines earnings eligible for retirement contributions

See PeopleSoft Human Resources Manage Base Benefits, PeopleSoft Human Resources Manage Base Benefits: Setting Up Retirement Plans.

Setting Up the Thrift Savings Plan (TSP)

The Thrift Savings Plan (TSP) also uses a special accumulator to calculate eligible earnings.

TSP has the following characteristics:

• Both the pre-offset and offset earning codes add to the special accumulator.

• Annuitant employee withholdings and employer contributions are calculated on pre-offset earnings during payroll and reported on the TSP Interface.

To set up the TSP:

1. Access the Savings Plan Table component.

   Navigation: Setup HCM, and then Product Related, and then Base Benefits, and then Plan Attributes, and then Savings Plan Table

2. On the Employee Limit on Investments page, in the Use Special Accumulator field, enter the special accumulator that defines earnings eligible for TSP contributions.

See PeopleSoft Human Resources Manage Base Benefits, Setting Up Savings PlansPeopleSoft Human Resources Manage Base Benefits: Employee Limit on Investments Page.

Setting Up the Job Record

An annuitant hire record has the following characteristics:

• The Annuitant Indicator identifies the employee an annuitant.

• The annuitant must be in an annuity pay group.

• The employee type is Exception Hourly.

• An annual annuity amount must be specified in the Annuity Offset Amount field on the Compensation Data page.

• Expected pay base rates are reduced the annuity offset amount.

To set up the job record for an annuitant:

1. Access the annuitant’s job record in the HR Processing USF component (or Add Employment Instance USF component).

   Navigation: Workforce Administration, and then Job Information, and then HR Processing USF (or Workforce Administration, and then Job Information, and then Add Employment Instance USF)

2. On the HR Processing USF, Job Data page, in the Position field, enter the position for which the annuitant was hired.

3. Click the FEGLI/Retirement/FICA link on the HR Processing USF, Job Data page, and then on the FEGLI/Retirement/FICA secondary page do the following: enter the FEGLI code to enroll the employee into FEGLI; enter the appropriate Retirement Plan; and select the appropriate Annuitant Indicator:

   • 1 = Reempl Ann-CS

   • 4 = Ret Off/Reempl Ann-CS

   • 5 = Ret En/Reempl Ann-CS

   • A = Reempl Ann-FE

   • C = Ret Off/Reempl Ann-FE

   • E = Ret Enl/Reempl An-FE

4. On the Position Data page, assign the employee to the annuitant pay group and select the Employee Type of E (exception hourly).

5. On the Compensation Data page, enter the Annuity Offset Amount (which cannot be greater than the Base Pay amount).

   Note:

   The Annuity Offset Amount field is available only after the annuitant job record has been saved with one of the Annuitant Indicator values: 1, 4, 5, A, C or E.

   The full annual annuity amount is recorded. The Annuity Offset Amount will reduce the Expected Pay Base Pay values. When you click the Expected Pay link, the system may display a message showing the rates that have been changed. When you click OK, the Expected Pay secondary page appears, where you can view details of the annuitant’s expected pay. Base Pay amounts reflect the pay after being reduced by the annuity offset amount. The Locality/LEO Adjustment amounts are not reduced. Payroll uses this hourly rate.

See:

• PeopleSoft Human Resources Administer Workforce, Adding an Employment Instance PeopleSoft Human Resources Administer Workforce: Add Employment Instance USF - Job Data Page.

• PeopleSoft Human Resources Manage Base Benefits, (USF) Enrolling Employees in Benefit Programs and Plans, PeopleSoft Human Resources Manage Base Benefits: FEGLI/Retirement Data/FICA Page.

Setting Up the Employee's Additional Pay

To set up additional pay, you must identify the offset earnings code and hourly rate to use, and the pay periods to which they apply.

To set up additional pay:

1. Access the Employee Pay Data USF, Create Additional Pay component.

   Navigation: Payroll for North America, and then Employee Pay Data USF, and then Create Additional Pay

2. On the Create Additional Pay page, enter the offset earnings code in the Earnings Code field, enter the full pay period hours in the Hours field, and enter the offset rate in the Hourly Rate field.

   The adjusted base pay, minus the annuity, divided by 2087 hours, equals the offset hourly rate to enter in Additional pay. For example, assume an adjusted base pay, including LEO/LOC, of $51,919.00, and annuity of $20,000. The adjusted base pay of $51,919.00, minus the annuity of $20,000.00, divided by 2087 hours, gives the annuitant an offset hourly rate of $15.29. This is the hourly rate to enter in Additional Pay.

   See, Example: Annuitant Paycheck, Annuitant Earnings later in this topic.

3. Also on the Create Additional Pay page, select the OK to Pay check box, and select the check box for all of the pay periods to which additional pay applies in the Applies to Pay Periods group box.

When paysheets are processed, the system creates two paylines, Addl Line Nbr 0 and Addl Line Nbr 1 .

• Addl Line Nbr 0 includes the regular standard hours and hourly rate from the Job Record. The hourly rate is the pre-offset rate and is used to pay premium earnings. All premium earnings must be entered on this earnings line.

• Addl Line Nbr 1 includes the earnings code, hours and hourly rate from the Additional Pay page. The hourly rate Is the offset rate and is used to pay all regular earnings. All types of regular earnings must be entered on this earnings line.

See Defining Additional Pay Earnings.