The Periodic Consolidation Process

A pension calculation can use vast amounts of historical payroll data. Earnings, hours, and contribution histories can cover twenty years or more. If every calculation involved looking up each paycheck an employee received over their entire period of employment, you would have to keep all that data available indefinitely rather than eventually archiving it. This would also require extensive processing time.

A more efficient way to deal with this data is to use a periodic consolidation process. This gathers the paycheck data and stores yearly or monthly totals. Using consolidations, you can archive the raw payroll data and still have the relevant information available during calculations.

Consolidations produce monthly or annual payroll accumulations. In order to set up consolidation rules, you need to understand how they fit into pension plan processing.

As employees are paid, you need to update the consolidated data. You do this through periodic processing.

When you run a calculation, the system uses the most recent consolidation data. If your consolidations are not up to date, the calculation does not use the most recent payroll information.

New payroll information is available for consolidation after each payroll run. At a minimum, you should regularly process consolidations after the last pay run of each consolidation period.

The "process through" date associated with each consolidation period tells you when the data was last updated. If the process through date is earlier than the period end date, you do not yet have final data for the period.

By separating the consolidation process from the rest of the pension calculation, you can schedule this time-consuming operation for a convenient, off-peak time.

Generally, you process consolidations for similar employees at the same time. For example, you might process all weekly-paid employees together.