Using Benefit Eligibility Results
You use benefit eligibility results primarily for reporting and for grouping logic. For example, if you set up a group containing only the employees eligible for early retirement, you can use this group when calculating early retirement factors or benefits.
You can use the same grouping strategy in other functions. For example, a death benefit offers different optional forms from an actual retirement, so the optional forms of payment function result consists of two definitions. The groups for those definitions check benefit eligibility to determine whether you are calculating a death benefit.
You can also use benefit eligibility results in the vesting function. The vesting pages provide a place to list any retirement types that trigger full vesting.
The calculation worksheet includes information about an employee's retirement type, and you'll probably want to include this information in your employee communications.
A benefit eligibility function result returns eligible or ineligible. An employee can be eligible for more than one benefit, for example normal retirement and early retirement.
If you want to ensure that employees are only eligible for one retirement type—for example, normal retirement but not early retirement—you must configure the definitions appropriately. In this case, the early retirement definition would include a condition requiring that the employee be ineligible for normal retirement. Such a condition, in turn, means that the system must evaluate normal retirement eligibility before evaluating early retirement eligibility. Thus, the normal retirement function result is placed before the early retirement function result in the job stream.
You can use the same principle to make several or all of the retirement types mutually exclusive. Pay close attention to dependencies so that the function results are in the right order in the job stream. Also, remember that when you enter the definitions, you have to set up the first benefit eligibility definition and function result before setting up the next benefit eligibility definition.
If you set up vested and unvested termination retirement types, you may want to keep them out of the mutually exclusive group. This way a terminated vested employee can be eligible for normal or early retirement benefits and still retain the terminated vested designation.
Benefit eligibility age requirements are typically based on an employee's age at benefit commencement date (BCD). That is, if a plan's normal retirement age is 65, a participant becomes eligible for normal retirement benefits at 65, regardless of when he separates from service.
For example, Jeremy and Kevin are twins working at your company. Jeremy terminates at age 40, while Kevin keeps working until he's 65. Both become eligible for normal retirement benefits on the same day.
If you use benefit eligibility in your grouping for other functions, you'll probably set up the benefit eligibility criteria based on BCD. For example, you have separate benefit formulas for early retirement, available at age 55, and normal retirement. Eligibility for early retirement is part of the group criteria for the early retirement benefit formula. If you base early retirement eligibility on the age at BCD, the system can calculate early retirement benefits for terminated vested employees who are at least 55 years old. If eligibility were based on the age at event date, you could never calculate early retirement benefits for someone who separated from service before reaching early retirement age.
If you do not use benefit eligibility as grouping criteria, you might choose to use the age at event date in determining eligibility. This way the calculation tells you the benefits for which an employee is eligible at the time of separation from service.
To set up the right definitions, you must decide what information you want from the benefit eligibility function. Also, remember that you can use different ages in different definitions.