Creating match percent schedule contribution rules

Use this procedure to define contribution rules for a plan where employees contribute a percent or an amount that your employer matches, such as 401k or 403b. The employer match is calculated as a percentage of the employee's contribution and can be fixed or cumulative. If the match calculation is fixed, the employer match directly corresponds to the percent of the employee's contribution. If the match is cumulative, the company match varies by incremental percents. The company match varies as the employee's contribution percent increases.

Note: 

If the plan does not have unique contributions for specific benefit groups, you must only define this contribution type once for a plan by leaving the Benefit Group field blank. If the plan has different contributions for different groups of employees, define one of these contribution types for each benefit group for which contributions are unique. If you define multiple contribution records for one plan, you may choose to leave the benefit group field blank on one of the records. The record with no benefit group is applied to all eligible employees who do not belong to the groups attached to the other records.

  1. Select Benefits > Plans > Benefit Plans.
  2. On the Benefit Plan Contributions tab, click Create.
  3. Select a Coverage Class, Benefit Group, and the Contribution Start Date.
  4. Specify this information for all Contribution Types:
    Contribution Tax Type

    Select whether the employee contributions are pre tax, after tax or both. If the plan does not include employee contributions, select No Employee Contribution. Important: This field must match with the deductions attached to the plan.

    Default Tax Type

    Select a Default Tax Type when the Contribution Tax Type is Both.

    Currency

    Select the currency in which to display tax type.

  5. In the Calculation section, specify this information:
    Employee Contribution Type

    Select whether employees can contribute as a percent, an amount, or both, or no contribution.

    Increment

    Specify the percent increment employees can contribute to the plan. For example, if you type one, employees can make contributions of one percent, two percent, three percent, etc, within the other limits of the schedule. If you type 0.5, employees can make contributions of 0.5%,one percent, 1.5%, etc.

    Maximum Percent

    Specify the maximum total percent employees can contribute to the plan with pre tax and after tax contributions.

  6. In the Match section, specify this information:
    Match Optional

    Select whether the employer will match contributions as pre tax, after tax or both.

    Calculation

    Select either Fixed or Cumulative to define how the employer's match is calculated. If the employer matches only the contribution level the employee elected, select Fixed. If the company match includes all contribution levels up to the level the employee elected, select Cumulative.

  7. If the Contribution Type is Amount, specify contributions based on salary.

    Calculating contributions based on salary

  8. Optionally, define how adjustments are to be calculated.
    See Calculating adjustments for contributions.
  9. Click Save.
  10. On the Detail tab, click Create, and specify this information:

    Define the employee, company, and company match contributions with limits based on the employee contribution.