Using Time-Sensitive Grouping Based on Eligibility
This section provides overview of eligibility and eligibility-based groups and discusses setting up eligibility-based groups.
The plan eligibility function produces a timeline of eligible and ineligible periods. Service typically accrues only during periods of eligibility. Cash balance accounts and employee contributory accounts typically accumulate both credits and interest during periods of eligibility, but only accumulate interest during periods of ineligibility.
Following are some examples that use eligibility history as grouping criteria.
Service
Service only accrues while an employee meets plan eligibility criteria:
|
Group Criteria |
Service Definition |
|---|---|
|
Eligible |
Plan service rules |
|
Ineligible |
No service accrues |
Elapsed time and hours equivalence service accrue based on an employee's action and reason history. If you fail to establish eligible and ineligible definitions, employees continue to accrue service for time worked while ineligible. For example, an hourly employee who used to be salaried could continue to accrue service under the salaried plan. This may be desirable for vesting service, but is likely undesirable in other situations.
Hours counting service accrues based on consolidated hours. If the consolidated hours definition already distinguishes between hours worked while eligible and hours worked while ineligible, you may not need to create separate eligible and ineligible definitions for this service type.
Cash Balance Accounts
Accounts earn interest at all times, but only get additional earnings-based credits during periods of eligibility:
|
Group Criteria |
Cash Balance Definition |
|---|---|
|
Eligible |
Cash balance credit of 4 percent of salary and interest |
|
Ineligible |
Interest only |
If the consolidated earnings definition excludes ineligible earnings, you may not need to set up eligible and ineligible groups for cash balance accounts.
If the consolidated contributions definition only includes eligible contributions, you may not need to set up eligible and ineligible groups for employee accounts.
Consolidated Earnings
The final average earnings (FAE) function only uses earnings from periods when an employee met the plan's eligibility requirements. Because FAE uses the consolidated earnings result, you restrict earnings at the consolidation level:
|
Group Criteria |
Consolidated Earnings Definition |
|---|---|
|
Eligible |
Plan earnings definition |
|
Ineligible |
Zero earnings |
Note: In this scenario, you would set the FAE definition to ignore zeros. Otherwise, you might lower the average by picking up zeros from periods of ineligibility.
When employees change jobs within a company, they often move into and out of pension plan eligibility. When you run a calculation for such an employee, service accrual may stop during the period of ineligibility and resume if the employee becomes eligible again. For a cash balance plan, account credits probably stop, but interest continues during the period of ineligibility. You may also want to exclude earnings from the consolidated earnings history to prevent the final average earnings function from using the ineligible earnings.
All of these scenarios demand that you set up different definitions for eligible and ineligible periods. As employees move in and out of eligibility, the system will automatically use the appropriate definition for the eligible and ineligible periods. To apply these eligible and ineligible definitions, you need eligible and ineligible groups.
Note: PeopleSoft delivers two group custom statements: PA_ELIG and PA_INELIG. When you select Eligible or Ineligible, the system uses these statements to append the eligible or ineligible criteria to your group. Do not modify these statements.