Calculation Processes

Some of the system's core functions, listed below, have both Calculation and Periodic Processing modes:

• Plan eligibility

• Participation

• Service

• Vesting

• Cash balance accounts

• Employee accounts

During a periodic processing job, these run in the same order that they do during a calculation. This means that plan eligibility runs first, enabling the system to filter out employees who have never been eligible.

Periodic processing creates a plan history that is independent of a particular calculation or termination date. Unlike calculations, periodic processing does not project into the future.

Depending on which function you use and whether you are running periodic processes or a calculation, you sometimes add onto the existing history or sometimes discard it and start a new one.

Function	Periodic Mode	Calculation Mode
Eligibility and participation	Add onto existing history.	Disregard history; calculate from the beginning.
Service and vesting	Rebuild entire history each time.	Disregard history; calculate from the beginning.
Cash balance accounts and employee accounts	Add onto existing history. Note: In periodic mode, these functions do not process partial periods—only completed periods.	Use existing history for complete periods before the event date, then calculate additional accruals from the end of the available history up to the event date.

Plan Eligibility

The Plan Eligibility process always runs by default. If an employee is not and has never been eligible, processing for that employee ends. If an employee is currently or was previously eligible, processing continues, and the individual processes that you select on the Request Process page run.

The Plan Eligibility process builds a timeline with an employee's eligible and ineligible status. Periodic processing adds onto the existing history. The only way to rebuild eligibility history from the beginning is by selecting the Delete and Rebuild Processing mode.

WARNING:

If you decide to delete and rebuild eligibility history, do not run any of the other processes affected by processing mode at the same time, unless you want to delete and rebuild those histories, too.

Other periodic processes use eligibility history. For example, if your service rules do not award service credit during periods of plan ineligibility, then the Service process uses the eligibility history to determine when employees are eligible and ineligible.

The calculation process does not use the stored eligibility history in calculations, because it recreates the eligibility history from the beginning.

You view eligibility history on the Review Plan History - Eligibility and Participation page.

Participation

The Participation process evaluates employees according to the participation criteria, typically age and service. After an employee meets the criteria, the participation status does not usually change unless the employee loses service due to a break. Therefore, the participation history consists of a single date on which the employee began participating.

Employees can lose participation status due to withdrawal of contributions or breaks in service. If such an employee later requalifies for participation, the history still consists of only a single participation date (as if the earlier participation date never existed).

The stored participation history can be used if it is referenced by another periodic process. For example, the service rules can exclude time before the participation date. The calculation process never uses the stored history, because it recalculates the date from the beginning.

You view participation history on the Review Plan History - Eligibility and Participation page.

Service

The Service process calculates service according to the plan rules. If you have different service rules in a plan (participation service, vesting service, or service credit), the system processes each of the different service components. Running the Service process also automatically runs the Vesting process.

The Service process results are stored as history. The stored history can be used in other periodic processes. For example, cash balance credits can be based on service. The calculation process never uses the stored history, because it recalculates the entire history from the beginning.

The Service process always runs in Delete and Rebuild mode, so each time you run the Service process, the system deletes prior service histories and recalculates the entire history from the beginning. This enables the system to adjust prior periods if subsequent actions have affected the service amount.

You normally update the service history at the end of each service period. You can calculate service more often; the system includes service as of the process through date that you select.

You view service history data on the Review Plan History - Service History page.

Vesting

Whenever you run the Service process, the system automatically runs the Vesting process.

The Form 5500 participant count extract uses the vesting result and the pension status to categorize participants. Therefore, if you plan to run that extract, be sure to run the Vesting process (and therefore the Service process) immediately beforehand.

You view vesting result on the Review Plan History - Plan Information page.

Cash Balance Accounts

Cash balance accounts are the hypothetical employee accounts used in a cash balance plan to represent employees' accrued benefits. Cash balance accounts consist of credits—calculated as a percentage of employee earnings—and applicable interest.

Cash balance results are stored in a period-by-period history. When you run a calculation, the system uses the stored history (that is, periods completed before the event date) and calculates accrual only for subsequent periods. The history never has gaps.

You can update cash balance accounts as often as necessary; the system includes data as of the process through date that you select.

Cash balance credits are based on consolidated earnings. Always run consolidated earnings for the period before running cash balances. Define your plan rules so that consolidated earnings appear earlier in the calculation job flow. If you do this correctly, you can run both processes in the same job and consolidations run first.

You view cash balance history data on the Review Plan History - Cash Balance History page.

Employee Accounts

Employee accounts track money that employees have contributed toward their pension benefits. Employee accounts consist of credits—determined by consolidated contributions—and applicable interest.

Employee account results are stored in a period-by-period history. When you run a calculation, the system uses the stored history (that is, periods completed before the event date) and calculates accruals only for subsequent periods. The history never has gaps.

You can calculate employee account balances as often as necessary; the system includes data as of the process through date that you select.

Employee accounts are based on consolidated contributions. Always run consolidated contributions for the period before running the Employee Accounts process. Define your plan rules so that consolidated contributions appear earlier in the calculation job flow. If you do this correctly, you can run both processes in the same job and consolidations run first.

You view employee accounts history data on the Review Plan History - Employee Account History page.