Understanding Consolidations

A pension calculation can use vast amounts of historical payroll data. Earnings, hours, and contribution histories can cover twenty years or more. If every calculation involved looking up each paycheck an employee received over their entire period of employment, you would have to keep all that data available indefinitely rather than eventually archiving it. This would also require extensive processing time.

A more efficient way to deal with this data is to use a periodic consolidation process. This gathers the paycheck data and stores yearly or monthly totals. Using consolidations, you can archive the raw payroll data and still have the relevant information available during calculations.

Consolidations produce monthly or annual payroll accumulations. In order to set up consolidation rules, you need to understand how they fit into pension plan processing.

As employees are paid, you need to update the consolidated data. You do this through periodic processing.

When you run a calculation, the system uses the most recent consolidation data. If your consolidations are not up to date, the calculation does not use the most recent payroll information.

New payroll information is available for consolidation after each payroll run. At a minimum, you should regularly process consolidations after the last pay run of each consolidation period.

The "process through" date associated with each consolidation period tells you when the data was last updated. If the process through date is earlier than the period end date, you do not yet have final data for the period.

By separating the consolidation process from the rest of the pension calculation, you can schedule this time-consuming operation for a convenient, off-peak time.

Generally, you process consolidations for similar employees at the same time. For example, you might process all weekly-paid employees together.

There are two functions that always require the consolidated earnings function: final average earnings and cash balance accounts. Social security calculations can also be based on consolidated earnings—or, if you choose, on a final average earnings amount. Consolidated hours can also be based on consolidated earnings if you provide an earnings-to-hours divisor.

Service is the only function that uses consolidated hours.

Employee accounts is the only function that uses consolidated contributions.

The three consolidation functions, consolidated earnings, consolidated hours, and consolidated contributions, calculate periodic payroll accumulations.

Consolidated earnings and consolidated hours calculate this information in three stages:

• Actual hours, earnings, or contributions from payroll.

• Amounts after generating any hours or earnings.

• Final amounts after any other adjustments.

Consolidated earnings has one additional result: the partial period fraction. This indicates the portion of the consolidation period that an employee works. For example, if you consolidate earnings using calendar years and an employee terminates on April 1, the employee only worked 25 percent of the year and the partial period fraction is .25.

To see the details of an employee's consolidation history, select Pension, Pension Information, Update Employee Plan Data. This component includes pages showing the detailed consolidated data.

The consolidations functions get all the earnings, hours, and contributions data from PeopleSoft payroll tables. If you are running a standalone version of Pension Administration, you have to bring your payroll data into the PeopleSoft tables before running the consolidation.

If you use PeopleSoft to track multiple concurrent jobs and you have the Single Job Environment check box deselected, the consolidation functions do not distinguish earnings, hours, or contributions based on job. The other calculation functions only use data for the first job; however, the consolidation functions incorporate the data for all jobs.

Following are the payroll tables that provide data to each of the three consolidation functions. When you populate these tables, whether during the initial data conversion or to bring data into a standalone system, be sure to populate all of the indicated tables. Consolidations do not work unless an employee has data in every table. If the data is unavailable, create a row with zeros in all of the numeric fields.

Pension Administration includes a periodic process to copy payroll data into pension history tables. This enables you to purge data from the payroll tables while still leaving the necessary information available for pension processing.

The consolidation process always uses data from the payroll tables if it is available. If the payroll tables do not have data for a period, the consolidation process looks for data in the pension archive versions of the tables. If you enter an override in the pages where you maintain consolidated data, the process does not look at either table for the period.

If you reconsolidate after purging data from the payroll tables, data for the reconsolidation comes from the pension archive tables. The pension archive table names are similar to the payroll source table names, and they have the prefix PA_HST_.

You also use the pension archive tables if you load historical payroll data at the time of the initial Pension Administration implementation. If you use Application Designer to look at the pension archive tables, you can see which fields the system copies.

To process multiple jobs for consolidating hours, on the Plan Implementation page you must deselect the Single Job Environment check box. Only jobs for which an employee is eligible within the specified plan are considered for consolidations, unless you use the W-2 option. Most job consolidations are processed one job at a time. The results of each job's consolidations are then added for each calculation period.

Hours consolidations based on consolidated earnings are treated differently when processing multiple jobs. In this case, the system divides the consolidated earnings by the rate in the first primary job record that it finds.

An employee's consolidation history must not be interrupted. If an employee leaves the organization and is later rehired, you could end up with gaps in the consolidation history. This could also happen if an employee transfers to another job and becomes ineligible for a particular plan but then transfers back and becomes eligible again.

If there are such gaps in the consolidation history, you cannot calculate a pension benefit. Therefore, you must set up the consolidation rules to prevent these gaps. You do this by specifying consolidation definitions used specifically during periods of ineligibility. You associate different definitions with eligible and ineligible periods, using the Function Result page.

If you use the same definition for eligible and ineligible periods, you have zero earnings and hours for the periods between a termination and a rehire. If, however, an employee transfers to a different job within the organization, there may be earnings or hours from that ineligible job. For this reason, you should instead create definitions specifically for the ineligible periods. Configure these definitions so that they always produce zero earnings and hours. To do this, base the definitions on actual payroll earnings or payroll hours and specify a "dummy" earnings code that has no associated earnings or hours.

For consolidated hours, you have another alternative. You can use the same consolidated hours definition for eligible and ineligible periods, but configure the service definition to suppress service during periods of ineligibility, regardless of whether there are consolidated hours.