Implementing Service Purchase and Service Buyback
Service purchase and service buyback provisions enable employees to buy service credit for a plan.
Service Purchase
In certain situations, employees can purchase service for a period by paying the contributions and interest that a plan would have collected if the employee had worked and contributed during that period. Examples are the purchase of service for periods of military leave, or for periods during which an employee was working but was not eligible to participate in the plan.
Service Buyback
Service buyback has two aspects:
Administering the withdrawal of contributions, and setting the associated employee account and service accrual to zeroes.
Manage this process on the Withdraw Contribution Page.
Tracking repayments and the associated service credits.
Manage this process using the service purchase pages described in the topic Understanding Service Purchase .
Setup for Service Purchase and Service Buyback
Setup for service purchase and service buyback processing occurs in three areas:
Employee account setup
In the employee account definitions, you establish a special type of account for tracking employees' payments toward service purchase or service buyback. By entering a consolidated deductions data source in this definition, you provide a way for payments that are made through payroll deductions to be automatically credited to the account. You can also manage lump sum or installment payments through integration with PeopleSoft Receivables.
Note: The specified employee account can be used only once per employee. So when you set up your employee accounts for service purchase or service buyback, the best practice is to create a set of identical accounts where the base account name has at most eight characters, and the additional accounts have the same name with sequential two-digit suffixes, starting with 01. Then, if an employee enters into more than one service purchase arrangement using the specified account, the system automatically looks for the next unused account in the set.
Function result setup
On the Function Result page, you associate the purchase account with a parent account, the primary contributory account, and with one or more service function results to ensure that transactions in the purchase account or withdrawal account are automatically rolled up to the corresponding contribution and service accruals. You can specify that service be credited on full payment, on any payment, or on a prorated basis.
Service purchase setup
Use the pages under to configure your service purchase processing rules.