Payee Administration

Payee Event Administration

Certain events in the lives of pension payees require you to perform specific tasks. After employees retire and begin receiving payments, many things can still happen to affect their pensions. If a payee dies, you may need to stop making payments. Depending on the payment form, you may also need to begin payments to a beneficiary. If the payee chose a level income option, you may need to decrease payments when the retiree attains social security retirement age. Also, retirees may receive cost of living adjustments.

You manage most of these tasks by modifying the payment schedule to stop, start, or change payments.

Non-employee Payee Administration

In addition to employees and former employees, there are two other types of plan participants: pension beneficiaries and QDRO alternate payees, former spouses who have obtained a right to a pension benefit as part of a court-ordered divorce settlement. With Pension Administration, you enter both types of payees into the system as plan participants and store personal and payment-related information for them.

Pension Administration can automatically determine beneficiary payment amounts based on a retiree's payment amount (including cost-of-living adjustments) and the selected form of payment.

Pension Administration tracks both types of non-employees through their IDs, and cross-references non-employees with the employees who originally earned the benefit.

QDRO Administration

When a Qualified Domestic Relations Order from the court instructs you to pay a specified portion of an employee's benefit to an alternate payee, a number of things must be tracked, including information about the alternate payee and the benefit owed to that payee.

The system enables tracking QDRO information and communications from the first time you receive notification that a divorce settlement may include a division of pension benefits. After you have recorded the amount due to the alternate payee, you can apply early commencement reductions and convert the amount into the optional forms of payment available to the alternate payee.

There are two aspects to the system's QDRO capabilities. On the administrative side, the system tracks information about the Domestic Relations Order (DRO), determines if it is, in fact, qualified and therefore a QDRO, determines the benefits due to the alternate payee, establishes the alternate payee in the system, and pays them through the same trustee extract used to pay retirees.

On the implementation side, you must ensure that you have set up plan rules in such a way that the QDRO calculations work correctly.