Understanding Plan Eligibility

The plan eligibility function determines which employees are allowed to participate in a particular plan. Plan eligibility is almost always based on job-related information, such as company, job, location, department, union code, active or inactive status, and salaried or hourly status.

The Plan Eligibility process is always the first process in your calculation job stream. This keeps you from processing ineligible employees.

This process establishes an effective-dated timeline of eligible and ineligible periods. Processing plan eligibility first ensures that this timeline is available to the functions that process employees differently during periods of eligibility and ineligibility. For example, if an employee changes jobs and becomes ineligible for a particular plan, that plan probably excludes hours, earnings, and service from the period of ineligibility.

Eligibility and participation are not the same thing. Eligibility is based on job criteria, such as company, union affiliation, and job classification. Eligibility establishes that the job an employee performs entitles the employee to participate in a pension plan. However, an eligible employee isn't necessarily a plan participant. For example, there may be age and service requirements that an eligible employee hasn't yet met. These requirements are handled by the participation function.