Example of Defining Elements for 403 (b) and After-Tax 403 (b) Deferred Compensation Plans

In this example, you're defining a Pretax Deductions element for a 403 (b) deferred contribution plan.

Your company Benefits policy makes the following available to your employees.

Contribution type	What you're providing
Base 403 (b)	This includes employer-matching, catch-up, and employer-matching catch-up. Your employer-matching policy is to provide 25 percent matching base and catch-up contributions to the plan but only when the employee contributes. Your Benefits policy has increased your maximum employer-matching limit to 7 percent of the person's pay per period. For catch-up contributions, you process them concurrently with the base contributions.
After-tax 403 (b)	This consists of base after-tax contributions of a flat amount. There are no employer-matching or catch-up contributions.

Note: The steps in this example apply to defining a 403 (b) deferred compensation contribution plan. In most cases, you can also use these steps to define 457 (b) plans.

For this example, you have an employee that requires:

• 403 (b) deferred compensation contributions based on 5% of their income.

• Participation in base catch-up contributions based on 5% of their income.

• After-tax 403 (b) deferred compensation contributions based on a flat amount of $100.

• Although the hire date on the person's record doesn't reflect this, they're eligible for the 15 Years-of-Service rule.

This example involves multiple high-level steps.

What you want to	How you do it
Define the base contribution element	Use the Elements task. This includes defining elements for: Base 403 (b) After-tax 403 (b)
Create the Benefits and Pensions calculation card	Use the Calculation Cards task to create this card if it doesn't already exist.
Define the details of the base contributions	You define the element amount rules for the base contributions on the employee's Benefits and Pensions calculation card. This includes adding calculation values for: Base contributions Catch-up contributions Employer-match contributions for base and catch-up 15 Years-of-Service rule
Define the details of the after-tax contributions	You define the element amount rules for the after-tax contributions on the employee's Benefits and Pensions calculation card. This includes adding calculation values for base contributions.
Feed the balance for eligible earnings	Because you're taking percentage deductions, you must establish a feed for the eligible earnings and total eligible earnings balances.

How You Define the Base Contribution Elements

This involves defining elements for the base and after-tax contributions. For further info, see Set Up 403 (b) and Roth 403 (b) Deferred Compensation Plans in the Help Center.

To create the elements for your plans:

1. Start the Elements task.

2. Define the base 403 (b) element.

   1. Click Create.

   2. Select the Pretax Deductions and Deferred Compensation 403b options, and click OK.

   3. Set the element's basic info.

      Field	What you enter
      Name	Example 403b plan
      Reporting Name	Example 403b
      Effective date	Leave the default
      Input Currency	Leave the default
      What is the earliest entry date for this element	First Standard Earning Date
      What is the latest entry date for this element	Last Standard Process Date
      Process the element only once in each pay period	No
      Can a person have more than one entity of this element in a pay period	No

   4. Click Next.

   5. For Is this element subject to iterative processing, choose Yes.

      For further info, see Iterative Processing for Pretax Deductions in the Help Center.

   6. Click Next.

   7. Review the summary, and click Submit.

   8. Create element eligibility, and save your element.

3. Define the after-tax 403 (b) element.

   1. Click Create.

   2. Select the Voluntary Deductions and Pension Plan After Tax 403b options, and click OK.

   3. Set the element's basic info.

      Field	What you enter
      Name	Example after-tax 403b plan
      Reporting Name	Example after-tax 403b
      Effective date	Leave the default
      Input Currency	Leave the default
      What is the earliest entry date for this element	First Standard Earning Date
      What is the latest entry date for this element	Last Standard Process Date
      Process the element only once in each pay period	No
      Can a person have more than one entity of this element in a pay period	No

   4. Click Next, and click Next again.

   5. Review the summary, and click Submit.

   6. Create element eligibility, and save your element.

4. Continue with the set up of the person's Benefits and Pensions card.

Get Started with the Benefits and Pensions Card

To configure the card:

1. From My Client Groups, click Payroll.

2. Click Calculation Cards.

3. Search for and select the person.

4. Open their Benefits and Pensions card for editing.

   Create it if it doesn't already exist.

5. Select Benefits under Component Groups.

6. Under Calculation Components, click Create.

7. Select Example 403b plan, and click OK.

8. Repeat to add the Example after-tax 403b plan element.

   You're now ready to configure the contribution details.

How You Define the Base Contribution Details

You set these contribution details as enterable calculation values on the card.

1. Under Calculation Components, select Example 403b plan.

2. Select Enterable Calculation Values on Calculation Cards, and click Create.

3. Add these calculation values.

   Calculation value name	With this value	Why you're doing this
   Percentage for Employee Contribution	05	The employee is contributing 5% of their income.
   Employer Contribution	Yes, with employee contributions	Your Benefits policy provides employer-matching contributions only when the employee contributes.
   Percentage for Employer Contribution	25	You're contributing 25% employer-match as a percentage of employee earnings.
   Employee Catch-Up Contribution	Yes	This employee has opted for catch-up contributions.
   Percentage for Employee Catch-Up Contribution	05	The employee is contributing 5% of their income.
   Catch-Up Processing Rule	Concurrent	You're processing catch-up contributions concurrently with the base.
   Employer Catch-Up Contribution	Yes, with employee contributions	Your Benefits policy provides employer-matching catch-up contributions only when the employee contributes.
   Percentage for Employer Catch-Up Contribution	25	You're contributing 25% employer-match as a percentage of employee earnings.
   Employer Contribution Limit Percentage	07	Your maximum employer-match limit is 7% of the person's pay per period.
   Enforce 15 years of service rule	Yes	Although the hire date on this person's record doesn't reflect this, they're eligible for the 15 Years-of-Service rule.

4. Click Save and Close.

How You Define the After-Tax Contribution Details

You set these contribution details as enterable calculation values on the card.

1. Under Calculation Components, select Example after-tax 403b plan.

2. Click Enterable Calculation Values on Calculation Cards, and click Create.

3. Add these calculation values.

   Calculation value name	With this value	Why you're doing this
   Flat Amount for Employee Contribution	100	The employee is contributing $100 per pay period.

4. Click Save and Close.

How You Feed the Eligible Earnings Balance

When you create an element that takes a percentage deduction, the payroll process doesn't take the deduction until you feed the eligible earnings balance.

1. Start the Balance Definitions task.

2. Search for and select the Deferred Compensation 403b Eligible Earnings predefined balance.

3. Click Edit and then Balance Feeds.

4. Configure the feeds for your eligible earnings results elements, and save your work.

5. Repeat these steps for the Total Deferred Compensation 403b Eligible Earnings predefined balance.