Employee Selection

Use periodic processes to maintain data about your active employees:

• Pension statuses.

• Consolidated payroll information.

• Service accruals.

• Balances for cash balance accounts and employee contributory accounts.

Your processing population should always include all of the active employees currently participating in a plan.

You might also need to process active employees who are no longer plan participants. For example, if a plan calculates vesting service based on all hours worked at your organization, not just hours worked while eligible for the plan, you must continue processing consolidated hours for employees who transferred out of the plan due to a job change. Conversely, if an employee transfers into the plan, you must retroactively process consolidated hours for the time spent at your organization before the transfer.

Sometimes you must also run processes for inactive employees. In particular, if employees receive additional pay after their retirement or termination date (vacation pay, bonuses, commission, or any type of deferred compensation), you must ensure that additional earnings, hours, and contributions are included in the consolidation history. Then, ensure that the consolidated information is included in service, cash balance, and employee contributory accounts. Therefore, you might continue processing employees who are no longer active, at least for a short time after they separate from service. If you have started paying pension benefits based on an earlier calculation that did not incorporate this information, you must recalculate the benefit, adjust the pension payments accordingly, and make retroactive payments for previous underpayment.