Terminating Employees

When an employee terminates, you first determine whether the employee has a vested benefit. Run periodic processing or a calculation to make this determination. If there is no vested benefit, your organization may still have some paperwork to complete (perhaps a notification letter), or you may be done.

If the employee is vested, you have to run a calculation and provide the departing employee with a statement of benefits. This is considered a final calculation, so be sure to run periodic processes through the termination date so that the calculation has the most up-to-date consolidation information available. If there are additional earnings or hours after the termination date, you manually override the consolidated amounts on the Review Consolidation Results (CONS_HOURS_HIST) pages.

After you produce an acceptable final calculation, be sure to protect the calculation used to produce the benefits. Protecting a calculation prevents the system from deleting the calculation or its results during periodic processing. It also prevents anyone from changing the calculation parameters and running the calculation with different assumptions.

After an employee has terminated, the benefit stops accruing and the actual amount of the benefit is then known. This information is important for your plan's annual actuarial valuation. In order to include the known benefit amount in Pension Administration's actuarial valuation extract, set up a payment schedule based on this amount.

Of course, at this point you do not know what optional form of payment the employee will choose, nor do you know when the employee will elect to start receiving payments. The payment schedule should therefore use the normal form of payment (typically, a single life annuity) scheduled to start on the normal benefit commencement date.

To ensure that you do not use this schedule as the basis for real pension payments, set up the schedule with a deferred status. This prevents the system from including payment instructions in the Trustee Extract process.

Scheduling a payment requires that you complete several steps: establishing the payee record, recording an optional form of payment selection, and setting up the actual schedule. These are the same steps that you would perform if the employee were retiring—except that you do not manually update the pension status. Your next periodic processing job automatically sets the status to Terminated Deferred Vested.

The following table summarizes the tasks you perform to terminate an employee:

Task	Page	Navigation
Verify that the employee has terminated and is vested.	Salary Rate History	Pension, Pension Information, Review Job History, Salary Rate History
Employee Type History	Pension, Pension Information, Review Job History, Employee Type History
Action/Reason History	Pension, Pension Information, Review Job History, Action/Reason History
Plan Information	Pension, Pension Information, Review Plan History, Plan Information
Eligibility and Participation	Pension, Pension Information, Review Plan History, Eligibility and Participation
Service History	Pension, Pension Information, Review Plan History, Service History
Cash Balance History	Pension, Pension Information, Review Plan History, Cash Balance History
Employee Account History	Pension, Pension Information, Review Plan History, Employee Account History
Action/Reason History	Pension, Review Calculations, Review Main Results, Action/Reason History
Vesting	Pension, Review Calculations, Review Calculation Results, Vesting
Run consolidations through the termination date. Make any manual corrections to the consolidations based on late earnings, hours, or contributions.	Batch Periodic Process	Pension, Periodic Processes, Request Process, Batch Periodic Process
Earnings History	Pension, Pension Information, Review Consolidation Results, Earnings History
Hours History	Pension, Pension Information, Review Consolidation Results, Hours History
Contribution History	Pension, Pension Information, Review Consolidation Results, Contribution History
Calculate the benefit, and prepare a benefit statement.	Request Calculation	Pension, Calculations, Request Calculation, Request Calculation
Protect the calculation and the results from deletion.	Protect Calculations	Pension, Calculations, Protect Calculations, Protect Calculations
Establish the employee as a pension payee.	Create Payee	Pension, Payments, Create Payee, Create Payee
Select an optional form of payment.	Identify Optional Form	Pension, Payments, Identify Optional Form, Identify Optional Form
Create a deferred payment schedule, based on a default payment form and benefit commencement date.	Payee Payment Schedule	Pension, Payments, Request Payment Schedule, Payee Payment Schedule
Record your activities and communications.	Capture Comment	Pension, Pension Information, Capture Comments, Capture Comment
Assign Activity List	Pension, Pension Information, Assign Activity List, Assign Activity List