Managing Savings Plans

This chapter discusses how to:

Run the savings management process.
Process and monitor the 403(b) and 457 savings plan balances.
Manage the 402(g) and 457 limit extensions and overrides.

Running the Savings Management Process

This section provides an overview of savings management process and pages and discusses how to:

Run the Calculate 403(b) Extensions process.
Run the Age-50 Extension process.

Understanding the Savings Management Process

The Savings Management Balances process updates balances (year – to – date [YTD] and life – to – date [LTD]) for 403(b) and 457 plans. The process uses the prior year savings management record balances and current year payroll YTD deduction balances to update the current year’s record each time the process is run. It also uses the prior year’s record to update the service years’ LTD field. (The first run of each year is slightly different because it clears some fields and carries over others.)

The Savings Management process will not update current year deduction balances on the Savings Management record until PeopleSoft Enterprise Payroll for North America is confirmed and the process is run.

The Savings Management Balances process creates 403(b) limit extension records for all employees in the specified company in Payroll for North America. The records produced are identified as Limit Type 402, Limit Extension Type A. If an employee has 15 or more years in a 403(b) plan, the limit extension amount (EXT_AMOUNT) will be populated by the 402(g) Annual Cap Expansion amount on the 403(b) Limit Table. If the employee has less than 15 years of service, the EXT_AMOUNT will be zero.

The Savings Management Balances process creates 457 limit extension records only if the employee had 457 balances in the previous year, or if this is the first year of enrollment in a 457 plan, after the first payroll is confirmed and the process is run. The records produced are identified as Limit Type 457, Limit Extension Type A. The EXT_AMOUNT is used in the calculation of the 3-year catch-up. It will be empty until the employee is eligible for the catch-up. You must manually populate the EXT_AMOUNT. The amount entered is the employee’s underutilized amount that is applicable. (Note that PeopleSoft requires you to maintain your own records for underutilization. When an employee is enrolled in more than one 457 plan, you must determine which plan’s underutilized amount will be used.)

The Age 50 process produces two types of age 50 limit extension types. The process assumes that an eligible employee has elected the age 50 extension. The election can be manually deselected on the Savings Management page.

Select the 402(g) option for 401(k) and/or 403(b) plans. One record with Limit Type 402, Limit Extension Type B will be produced for any employee in Payroll for North America who is age 50 or more by the date specified on the run control.
Select the 457 option for 457 plans. One record with Limit Type 457, Type B will be produced for any employee in Payroll for North America who is age 50 or more by the date specified on the run control.

Understanding Savings Management Pages

The types of savings management pages available depends on the type of savings plan offered by your organization. Base Benefits provides the following potential types of savings management limit extension pages:

402(g) 15-year catch-up extension for 403(b) plans.
457 3-Yr catch-up extension for 457 eligible governmental plans.
402(g) Age 50 extension for 401(k) and 403(b) plans.
457 Age 50 extension for 457 eligible governmental plans.

The Savings Management pages are used to:

Extend the regular 402(g) limit.
Extend the regular 457 limit.
Monitor the balances for 403(b) plans.
Monitor the balances for 457 plans.
Override the 402(g) limit and/or the 457 limit.

There are two processes used to generate the limit extension page types. The processes can be run for a company’s employee population or for an individual employee. The pages can also be manually added. The processes are:

The Calculate 403(b) Extensions process generates both the 402(g) catch-up records and the 457 catch-up records when it is run.
The Identify Age-50 Extension process generates either the 402(g) age extension or the 457 age-50 extension.

Pages Used to Generate Savings Management Pages

Page Name	Object Name	Navigation	Usage
SavMgmt Balances (savings management balances)	RUNCTL_SV403B	Benefits, Monitor Savings Pln Extensions, Calculate 403(b) Extensions, SavMgmt Balances	Calculate the company’s or an individual employee’s balances service years, eligible earnings, and the projected limits for the current or next year. Employees don't need to be enrolled in the 403(b) Savings Plan to run the Balance process. This process updates the Savings Management page.
403(b) Process Messages	SV403_MESSAGES	Benefits, Monitor Savings Pln Extensions, Review 403(b) Process Messages, 403(b) Process Messages	Review any error message that occurred in the savings management process.
Bn Age50 Runctl (benefits age 50 run control)	BN_AGE50_RUNCTL	Benefits, Monitor Savings Pln Extensions, Identify Age-50 Extensions, Bn Age50 Runctl	Identifies employees in Payroll for North America who are age 50 or more. Creates Age-50 limit extension records that extend/increase the 402(g) and/or 457 Savings Plan limits for elective deferrals as authorized by IRS regulations. The process is run separately for each limit type. For each limit type, a single Age-50 extension record will be produced for each year for each eligible employee in Payroll for North America. the process defaults the election to ON.

Running the Calculate 403(b) Extensions Process

Access the SavMgmt Balances page.

Chk Point Interval in Minutes (check point interval in minutes)

Because this is a long process, you can indicate how often the system should save or update information to the database during the process.

In case of unexpected system failure, this could limit the amount of reprocessing the system would have to repeat.

Restart Employee ID and Process to Restart

The system will enter the last successful Employee ID processed if the process did not successfully complete.

The Calculate 403(b) Extensions process clears the Ext Election (extension election) field on the Savings Management page. You can manually reset this value on the Savings Management page.

The 402(g) catch-up page is generated for all employees in Payroll for North America. If the employee has 15 or more years of service, the extension amount is populated with the 402(g) cap expansion from the 403(b) Limit Table. If the employee has less than 15 years of service, the extension amount will be zero.

The 457 catch-up page is produced only for employees in Payroll for North America with a 457 record in the prior year or 457 deductions in the current year.

Running the Age–50 Process

Access the Bn Age50 Runctl page.

As Of Date

Enter the last day of the calendar year for which the Age-50 extension applies.

402(g) Limit and 457 Limit

Select the limit extension you want to run.

Two separate runs are required to produce each type of the Age-50 limit extension.

Annl Cap Expsn(annual cap expansion)

Enter the amount specified by the IRS.

The Identify Age-50 Extensions process:

Identifies the employees in Payroll for North America who are age 50 or more.
Creates Age-50 limit extension records that extend/increase the 402(g) and/or 457 Savings Plan limits for elective deferrals as authorized by IRS regulations. The limit extension records are displayed on a Savings Management page.
Always selects the Ext Election (extend election) field on the Savings Management page. This value can be manually reset using the Savings Management page.

Age 50 records may be manually added. For employees not eligible for either a catch-up or Age-50 extension, the added record can be used to enter either of the following:

402(g) override amount on the Age-50 402(g) page.
457 override amount on the Age-50 457 page.

Monitoring the 403(b) and 457 Savings Plans Balances

This section discusses how to:

Monitor 403(b) and 457 balances.
Run the Identify Age-50 Extensions Process.

Pages Used to Monitor the 403(b) and 457 Plans Process

Page Name	Object Name	Navigation	Usage
Savings Mgt (savings management)	SAVINGS_MGT_EE	Benefits, Enroll in Benefits, Savings Extensions/Overrides, Savings Mgt	Manage the 402(g) and 457 limit extensions and overrides for 401(k), 403(b) and 457 Savings Plans. Review the year-to-date (YTD) and life-to-date (LTD) balances from the 403(b) process, enter contributions made at another company, and review an employee’s contribution amount for each applicable limit. Monitor the Catch Up Limit extension and election for 457 plans.
403(b) Process Messages	SV403_MESSAGES	Benefits, Monitor Savings Pln Extensions, Review 403(b) Process Messages, 403(b) Process Messages	Review any error message that occurred from the 403(b) process.

Page Name

Object Name

Navigation

Usage

Savings Mgt (savings management)

SAVINGS_MGT_EE

Benefits, Enroll in Benefits, Savings Extensions/Overrides, Savings Mgt

Manage the 402(g) and 457 limit extensions and overrides for 401(k), 403(b) and 457 Savings Plans.

Review the year-to-date (YTD) and life-to-date (LTD) balances from the 403(b) process, enter contributions made at another company, and review an employee’s contribution amount for each applicable limit.

Monitor the Catch Up Limit extension and election for 457 plans.

403(b) Process Messages

SV403_MESSAGES

Benefits, Monitor Savings Pln Extensions, Review 403(b) Process Messages, 403(b) Process Messages

Review any error message that occurred from the 403(b) process.

Monitoring 403(b) and 457 Balances

Access the Savings Mgt page.

Deferred Compensation

Company, Calendar Year, and Limit Extension Type	Select the desired company, calendar year, and limit type.
Limit Ext Type (limit extension type)	Catch-Up will be displayed on the page used to monitor 403(b) balances.
402(g) Limit and 457 Limit	Select the savings plan you want to review.
Ext Election (extension election)	If applicable, select this check box.
Ext Amt (extension amount)	For 403(b) plans, the amount displayed here represents the 15-Year catch-up extension amount as generated by the 403(b) process. This field is used as an extension to the 402(g) limit when you select the Ext Election check box. The system uses the lesser of the following three: The amount entered in the 402(g) Annual Cap Expansion field located on the 403(b) Limit Table. The amount entered in the 402(g) Lifetime Cap Expansion field located on the 403(b) Limit Table minus the amount of the Life-To-Date 402(g) Cap Used displayed on the 403(b) Balances page. The employee’s years of service multiplied by the amount entered in 402(g) Per Year Max Average field located on the 403(b) Limit Table, then subtract the amount of the Life-To-Date Employee Elective Deferrals 402(g) displayed on the 403(b) Balances page.
Ext Amt (extension amount)	For 457 plans, the underutilized 457 plan amount for previous years is entered here. The amount represents the 3-year catch-up extension amount.
Limit Amount Override	The override amount entered here will be used instead of the 402(g) limit or extended 402(g) limit if the Ext Election is selected. It will apply to only 403(b) plans.

457 Adjustments

This group box displays if you selected 457 in the Savings Plan Type field.

Other Employer Deferrals	The amount deferred to a 457 plan with another employer during the years of service with the current employer.
457 YTD Deferrals and 457 LTD Deferrals	457 year-to-date and life-to-date balances will automatically be maintained as part of the 403(b) Extensions process for those employees that are enrolled in both a 457 and 403(b) plan.

Balance Information

The system displays the YTD and LTD balances calculated from the 403(b) process.

Balance Adjustments (This Company Only)

Use this group box to enter employee contributions from a previous employer. The Calculate 403(b) Extensions process will use these figures.

Elective Deferrals Adjustment, Non-Elective Deferrals Adjustment, and Employee Contribution Adjustment	Enter the new amounts. Both the Calculate 403(b) Extensions and the Pay Calculations processes use these fields.
Vesting Adjustments	Enter the new amount. Both the Calculate 403(b) Extensions and the Pay Calculations processes use these fields. A vesting adjustment is considered to be a type of employer contribution, so it is used along with the Employer Contribution YTD/LTD balance fields and the Employee Contribution Adjustment field.

General / Alternative Election Data (all Applicable Companies)

Override Service Years Calc (override service years calculation)	Select this check box if you need to override the system-calculated Service Years YTD and/or the Service Year LTD displayed on the 403(b) Projections page.
Employer Contribution Maximum	This is the amount entered in the Maximum Yearly Deduction field located on the 415(c) Limit Table.
Termination Date (403[b] expected termination date)	If applicable, enter the date.
Hardship Withdrawal Date	Enter if applicable. The 403(b) Extensions process calculates and displays the corresponding Limit Reduction Amount in the record for the year following the hardship withdrawal date.
Current Year Contribution Subject to 415 Limit	This is the year-to-date deductions that are subject to the 415(c) limit.
Limit Reduction Amount	This amount constitutes the YTD elective deferrals up to the hardship withdrawal date, and is used to reduce the 402(g) limit for the following year when the contributions are reactivated.

Monitor 403(b) Plan Balances

The Calculate 403(b) Extensions process generates the Savings Management page(s) used for monitoring the 403(b) and 457 Savings Plan year-to-date and life-to-date balances.

To monitor 403(b) and 457 plan balances:

Run the Calculate 403(b) Extensions process on the Savings Management Balances page (RUNCTL_SV403B) to create the initial 403(b) page. The process creates the initial Savings Mgt (management) page and is identified with a Limit Extension Type of Catch-Up. The 402(g) Limit will be selected.

The Savings Mgt page for 457 plans will be identified with a Limit Ext Type of Catch-up. The 457 Limit will be selected.
Make any adjustments that should be considered during the 403(b) calculation process using the Savings Management page.
After each confirmed payroll period, run the Calculate 403(b) Extensions process on the Savings Management Balances page (RUNCTL_SV403B) to update balances for both the 403(b) and 457 plans.
Review employee contributions and deferrals on the Savings Mgt (management) page for 402(g) Catch-up Limit Extension Type.
Review 403(b) error messages.

This process creates a single 403(b) record for employees in Payroll for North America. If an employee has less than 15 years of service, the extension amount will be 0. If an employee has 15 years or more of service, the extension amount will be equal to the 402(g) Annual Cap Expansion amount on the 403(b) Limit Table.

The process clears the extension election check box. If the election extension check box is selected at year-end, the process will clear it when run in the subsequent year.

Managing the 402(g) and 457 Limit Extensions and Overrides

This section discusses how use the Savings Mgt pages to manage limit extensions and overrides.

Managing Extensions and Overrides

The override capability on the Savings Management page affects only those deductions subject to the 402(g) or the 457 limits. The override function works as follows for the two limits:

The EXT_ELECTION must be checked ON for the override to be recognized.
When the Age-50 process or the Calculate 403(b) Extensions processes are run for a subsequent year, the override amount will be cleared.
The override fields on the SAVINGS_MGT_EE records are used instead of the 402(g) regular/extended limit and/or the 457 regular/extended limit.

The overrides on the following records are used as follows:

SAVINGS_MGT_EE_ Record LIMIT_TYPE Value	SAVINGS_MGT_EE_ Record LIMIT_EXT_TYPE Value	Savings Plans to Which Override Applies
402	A (Catch-Up)	403(b) plans only
402	B (Age-50)	401(k) and/or 403(b) plans If an override exists on both 402 Limit Type records, the SUM of the overrides will apply to 403(b) plans. Only the 402 B Limit Type will apply to the 401(k) plan. If the employee is NOT age 50, the client may manually add an Age 50 record in order to enter an override.
457	A and/or B	457 Plan The new legislation states that the 3-year 457 catch-up and the Age-50 457 catch-up cannot be used in the same year. The system will use the override on the limit extension for the LIMIT_EXT_TYPE record that is selected or if both 457 LIMIT_EXT_TYPE records are selected and have override entries, the system will determine the record with the higher limit and will use the override amount on ONLY that record. If an employee is NOT eligible for either of the catch-ups, the employer may manually add an Age 50 record with only the override amount entered.

Example

The following example uses the these parameters:

Calendar Year: 2003
Regular 457 Limit: $12,000
Max. Annual 457 Catch-up: $24,000
Age-50 extension: $2,000
Employee’s Underutilized 457 Amount: $10,000

The following example illustrates limit determination when both 457 limit extension type (catch-up) records are selected. The example uses the following parameters:

Determination of the 3-Year Catch-up Limit

The system will first determine the LESSER of:
- Regular 457 Limit + Underutilized Amount (for example, $12,000 + $10,000 = $22,000) or,
- Max. Annual 457 Catch-up ($24,000)
Determination of the higher of the 3-Year Catch-up Limit versus the Age 50 Catch-up Limit

Then it will determine the HIGHER of:
- The result from Step 1 (for example, $21,000) (This record is represented by LIMIT_TYPE 402, LIMIT_EXT_TYPE A.) or,
- Regular 457 Limit + Age 50 extension (for example, $12,000 + $2,000 = $14,000) (This record is represented by LIMIT_TYPE 402, LIMIT_EXT_TYPE B.)

The higher record in Step 2 is the override that is used when both catch-up records are selected.