INDIVIDUAL ACHIEVEMENT. EDUCATIONAL EXCELLENCE. ADMINISTRATIVE INNOVATION. INSTITUTIONAL PERFORMANCE. PA Bug 2008 User Conference 1 Benefit/Deduction Combined

INDIVIDUAL ACHIEVEMENT. EDUCATIONAL EXCELLENCE. ADMINISTRATIVE INNOVATION. INSTITUTIONAL PERFORMANCE.

PA Bug 2008 User Conference

1

Benefit/Deduction Combined Limits

Presented by: Charlie Westfall Banner Human Resources

PA Bug 2008 User Conference 2

Introduction & Agenda

• New Calculation Rules for Benefit/Deduction Processing• Introducing 3 new Calculation Rules

• Enhancements for Combined Limit Processing• Tax-Sheltered Annuity Plans• Catch-Up Contribution Monitoring



3

New Benefit/Deduction Calculation Rules

More Choices! More Flexibility!


New Calculation Rules - PTRBDCA

• Three New ‘Calc Rules’ for a Benefit/Deduction Code

1. Flat Amount with Employer Share and Annual LimitDollars specified for both Deduction and BenefitNo Plan Code!

2. Percent of Gross with Employer Share and Annual LimitPercent specified for both Deduction and BenefitNo Plan Code!

3. Percent of Gross (Plan Code) with Employer Share and Annual LimitDeduction & Benefit Percent – directed by Plan Table‘Does not stop processing, unless Combined or

Compensation Limit is met’


Calculation Rule Employee Deduction Form (PDADEDN) Benefit/Deduction Rule Form (PTRBDCA)

Code Description

Amount Amount Amount Amount 1 2 3 4

- - - - - - Options - - - - - 1 2 3 4 5

Amount Amount Amount Amount 1 2 3 4

16 Flat Amount with

Employer Share

Employee Deduction Amount

Employer Amount

Employee Deduction

Code Annual Limit

Employer Deduction

Code Annual Limit

28 Percent of Gross Pay

with Employer

Share

Employee Percent of Gross Pay

Per Pay

Employer Percent of Employee Gross Pay

Per Pay

Employee Deduction

Code Annual Limit

Employer Deduction

Code Annual Limit

29 Percent of Gross Pay (each plan)

with Combined Limits –

Employer Match

Plan Code

Employee Percent of Gross Pay

Per Pay

Employer Matching Percent of Employee Gross Pay

Per Pay

Employee Deduction

Code Annual Limit

Employer Deduction

Code Annual Limit

Benefit/Deduction Layout



6

Combined Limits Processing

For Deduction/Benefit Maximum Monitoring


Tax Deferred Retirement Plans (U.S.)

• 403(b), 401(k), and 457(b)

• IRS Rules stipulate maximums on;Elective Deferral Limit

Annual Total Contribution Limit

Annual Compensation Limit

• Catch-Up ProvisionsAge 50+ Catch-Up

15-Year Rule


Maximum Tracking Figures for 2008

Elective Deferrals (403(b), 401(k), and 457(b) plans)

$15,500

Annual Contribution Limit $46,000

Annual Compensation Limit $230,000

50+ Catch-Up Contributions $5,000

15-Year Rule $3,000 yr / $15,000 cap


Background Considerations

• Currently, tracking multiple Benefits against maximums require ‘Associations’ on the rule form

• No dollar-based Employee/Employer Calc Rules

• No automated maximum tracking against a combined Employee/Employer total

• No automated provision for Maximum Compensation tracking

• Difficult to configure and monitor Catch-Up employees


Combined Limits Logic!

• So, we had an idea

• Went to work on HR 8.0

• Built processing rules that will monitor:• Combined Employee and Employer totals• Compensation maximum (Applicable Gross)• Allow switching an employee to Catch-Up rules


Process Flow

• Combined Limit Code:

Combined Limit Code

PTRBDCL

Benefit/Deduction Rule

PTRBDCA

Employee Deduction

PDADEDN

Benefit Deduction

Quick Set-up

PDABDSU

Payroll Proof & Calculation

PHPPROF


Step 1 – Combined Limit Rule Form (PTRBDCL)

• Establish code & rule that specifies Employee Limit, Employer Limit, Combined Limit, and Applicable Gross Limit.


Step 2 – Map Combined Limit Code to Deduction/Benefit

• Establish code on PTRBDCA for appropriate Deduction/Benefit program(s);

• Field enterable when the Calculation Rules are 11, 16, 21, 28 or 29.


Step 3 – Affiliate Combined Limit Codes - PTRBDCA

• Define all Benefit/Deduction codes that will operate together on the Combined Limit Deduction Group window;

• Replaces Associated block where maximums are compared across the benefit codes.


Step 4 – Include the code on Deduction Record

• Combined Limit Code must be present on the employee’s deduction record, PDADEDN;

• Code would be present on each record to which the limit checking should apply;

• Records should be associated by the new Combined Limit Deduction Group, so all totals would be evaluated together;

• Combined Limit Code is located on Deduction Detail record, allowing for effective-dated changes.



Step 5 – Quick Set-Up Form Change

• For new employees, Combined Limits Rule can be defaulted or changed on PTRBDSU;


Step 6 – Combined Limit Code on the History Record

• Each entry or change is captured on the Deduction History record – displayed on PEIDHIS.


Step 7 – Verify Consistency during Payroll Processing

• Edit installed in the Payroll Proof process, PHPPROF, to ensure all ‘Combined’ retirement deductions carry the same Combined Limit Rule Code;Note: An employee can have multiple Combined Limit Code

Deductions processed on the same payroll. Those Benefit/Deductions that are mapped together via the Combined Limit Deduction Group, must carry the same Combined Limit Code.


Step 8 – Payroll Calculation Processing

• New processing rules using Combined Limits• When a specific Limit is reached, the calculation will verify if

any other Limit has been reached.

Example: Employee has reached the limit on deduction portion - $15,500; however, has not reached the Combined Limit of $46,000 for Employee + Employer contributions;

and

If an additional contribution is available under the Employer Limit, the Benefit portion will continue until the Combined Limit is reached.


Step 9 – Benefit/Deduction Mass Change Process

• Mass Change rule and process has been enhanced to include the Combined Limit Code – PTRBDMC/PDPBDMC• Can assist in migration to Combined Limit Codes when

implementing;


Step 10 – Installation and Activation Scripts

• Install script for all new tables and columns for 8.0;

• Migration Alternatives;1. Manually build Combined Limit Rules for deductions;

PTRBDCL

2. Manually populate the appropriate records on PTRBDCA; Combined Limit Code and Combined Limit Group

3. Manually populate the existing records on PDADEDN or use the Benefit/Deduction Mass Change process to update employee records;

4. Manually adjust those employees that should have a 50+ Catch=Up or 15-Year Rule, for higher maximums.


Summary

• 3 New Benefit/Deduction Calculation Rule option for additional flexibility;

• New Combined Limit processing for multiple limit checking.


Questions & Answers

Thank You!

Charlie Westfall

[email protected]

Documents

INDIVIDUAL ACHIEVEMENT. EDUCATIONAL EXCELLENCE. ADMINISTRATIVE INNOVATION. INSTITUTIONAL PERFORMANCE. PA Bug 2008 User Conference 1 Benefit/Deduction Combined