Understanding Payment Streams

There are several reasons why you might set up multiple payments to a single payee. The simplest case is when a payee receives a benefit from more than one plan. In this case, you set up multiple retiree jobs, and set up separate payment schedules under each job.

Sometimes, however, there are separate payment streams within a single plan. This occurs when some aspect of the payment, typically the optional form or the funding provider, is different for a portion of the benefit. You set up both payment streams under the same record number (Rcd#), and distinguish between the payment streams with a payment number.

For example, suppose an employee has the option to withdraw contributions as a lump sum and take the remainder of the pension benefit as a single life annuity. In this case, the lump sum portion of the payment represents a separate payment stream from the annuity portion. A similar situation occurs when a pension is funded by two different providers—for example, following a merger or acquisition.

When you have two separate payment streams, the payment statuses are independent. Both payments can be active, or you can stop, defer, or suspend one payment stream without affecting the other.