Benefit/Deduction Combined Limits

1. Benefit/Deduction Combined Limits Presented by: Charlie Westfall Banner Human Resources

2. Introduction & Agenda • New Calculation Rules for Benefit/Deduction Processing • Introducing 3 new Calculation Rules • Enhancements for Combined Limit Processing • Tax-Sheltered Annuity Plans • Catch-Up Contribution Monitoring

3. New Benefit/Deduction Calculation Rules More Choices! More Flexibility!

4. New Calculation Rules - PTRBDCA • Three New ‘Calc Rules’ for a Benefit/Deduction Code • Flat Amount with Employer Share and Annual Limit Dollars specified for both Deduction and Benefit No Plan Code! • Percent of Gross with Employer Share and Annual Limit Percent specified for both Deduction and Benefit No Plan Code! • Percent of Gross (Plan Code) with Employer Share and Annual Limit Deduction & Benefit Percent – directed by Plan Table ‘Does not stop processing, unless Combined or Compensation Limit is met’

5. Benefit/Deduction Layout

6. Combined Limits Processing For Deduction/Benefit Maximum Monitoring

7. Tax Deferred Retirement Plans (U.S.) • 403(b), 401(k), and 457(b) • IRS Rules stipulate maximums on; Elective Deferral Limit Annual Total Contribution Limit Annual Compensation Limit • Catch-Up Provisions Age 50+ Catch-Up 15-Year Rule

8. Maximum Tracking Figures for 2008

9. Background Considerations • Currently, tracking multiple Benefits against maximums require ‘Associations’ on the rule form • No dollar-based Employee/Employer Calc Rules • No automated maximum tracking against a combined Employee/Employer total • No automated provision for Maximum Compensation tracking • Difficult to configure and monitor Catch-Up employees

10. Combined Limits Logic! • So, we had an idea • Went to work on HR 8.0 • Built processing rules that will monitor: • Combined Employee and Employer totals • Compensation maximum (Applicable Gross) • Allow switching an employee to Catch-Up rules

11. Process Flow • Combined Limit Code: Combined Limit Code PTRBDCL Benefit/Deduction Rule PTRBDCA Benefit Deduction Quick Set-up PDABDSU Employee Deduction PDADEDN Payroll Proof & Calculation PHPPROF

12. Step 1 – Combined Limit Rule Form (PTRBDCL) • Establish code & rule that specifies Employee Limit, Employer Limit, Combined Limit, and Applicable Gross Limit.

13. Step 2 – Map Combined Limit Code to Deduction/Benefit • Establish code on PTRBDCA for appropriate Deduction/Benefit program(s); • Field enterable when the Calculation Rules are 11, 16, 21, 28 or 29.

14. Step 3 – Affiliate Combined Limit Codes - PTRBDCA • Define all Benefit/Deduction codes that will operate together on the Combined Limit Deduction Group window; • Replaces Associated block where maximums are compared across the benefit codes.

15. Step 4 – Include the code on Deduction Record • Combined Limit Code must be present on the employee’s deduction record, PDADEDN; • Code would be present on each record to which the limit checking should apply; • Records should be associated by the new Combined Limit Deduction Group, so all totals would be evaluated together; • Combined Limit Code is located on Deduction Detail record, allowing for effective-dated changes.

17. Step 5 – Quick Set-Up Form Change • For new employees, Combined Limits Rule can be defaulted or changed on PTRBDSU;

18. Step 6 – Combined Limit Code on the History Record • Each entry or change is captured on the Deduction History record – displayed on PEIDHIS.

19. Step 7 – Verify Consistency during Payroll Processing • Edit installed in the Payroll Proof process, PHPPROF, to ensure all ‘Combined’ retirement deductions carry the same Combined Limit Rule Code; Note: An employee can have multiple Combined Limit Code Deductions processed on the same payroll. Those Benefit/Deductions that are mapped together via the Combined Limit Deduction Group, must carry the same Combined Limit Code.

20. Step 8 – Payroll Calculation Processing • New processing rules using Combined Limits • When a specific Limit is reached, the calculation will verify if any other Limit has been reached. Example: Employee has reached the limit on deduction portion - $15,500; however, has not reached the Combined Limit of$46,000 for Employee + Employer contributions; and If an additional contribution is available under the Employer Limit, the Benefit portion will continue until the Combined Limit is reached.

21. Step 9 – Benefit/Deduction Mass Change Process • Mass Change rule and process has been enhanced to include the Combined Limit Code – PTRBDMC/PDPBDMC • Can assist in migration to Combined Limit Codes when implementing;

22. Step 10 – Installation and Activation Scripts • Install script for all new tables and columns for 8.0; • Migration Alternatives; • Manually build Combined Limit Rules for deductions; PTRBDCL • Manually populate the appropriate records on PTRBDCA; Combined Limit Code and Combined Limit Group • Manually populate the existing records on PDADEDN or use the Benefit/Deduction Mass Change process to update employee records; • Manually adjust those employees that should have a 50+ Catch=Up or 15-Year Rule, for higher maximums.

23. Summary • 3 New Benefit/Deduction Calculation Rule option for additional flexibility; • New Combined Limit processing for multiple limit checking.

24. Questions & Answers Thank You! Charlie Westfall Charles.Westfall@SunGardHE.com