Defining vesting and covered compensation information

Select the pay class that determines each employee's covered compensation for the plan year. The application tracks covered compensation for comparison against the annual limits defined on Benefits Annual Limits (BN12.1). Covered compensation is not used to calculate contribution amounts.

If you leave this field blank, all compensation is included as an employee's covered compensation for the plan year.

If this is a 401(k) or 403(b) plan, select whether you want the Infor Payroll application to stop each employee's contributions when the employee's covered compensation for the plan year exceeds the maximum compensation limit.

If you select Yes and an employee participating in the plan has compensation that meets or exceeds the limit, the Infor Payroll application reduces the employee's compensation used to calculate contributions to the limit. If the Infor Payroll application reduces the compensation used to calculate contributions to zero, the Infor Payroll application does not calculate a contribution for the employee. You can override this field for individual employees in the Benefits tab of Employee (HR11.1).

If you select No, the Infor Payroll application continues to take contributions regardless of the maximum compensation limit.

If you select Annual Additional both; Maximum Compensation Employer Only (R) and an employee participating in the plan has compensation that meets or exceeds the limit, the Payroll application reduces the employee’s compensation used to calculate contributions to the limit. If the employee meets or exceeds the Maximum Compensation amount, the Payroll applications reduces the employer’s contribution used to calculate contributions to the limit, which does not affect the employee’s contribution.

Select a vesting schedule for the plan.

A vesting schedule is a table that determines when a company's contributions become non-forfeitable to an employee.

Select the type of year that is used to determine the vesting computation period.

If you select Calendar Year, the vesting computation period begins on the January 1 and ends on December 31.

If you select Employment Year, the vesting computation period is based on the employment date defined in the Vesting From Date. The From Date can be defined as an employee's hire date, adjusted hire date, anniversary date, and so on.

If you select Plan Year, the vesting contribution period is based on the month and day of the plan start date.

Closing the payroll cycle Payroll Close (PR197) updates vesting based on this field.

If this is a defined contribution or defined benefit plan, select the date on which vesting begins for each employee enrolled in the plan.

Select whether the vesting calculation includes the years an employee has worked before the plan start date.

For example, an employee was hired in 1962 and the defined contribution plan began in 1982. If you select Yes, the application includes the 20 years from 1962 to 1982 in vesting. If you select No, the application begins vesting calculations from 1982.

Select the pay class that determines each employee's vesting hours for the plan year.

If you leave this field blank, all hours are included for vesting calculations.

Select whether an eligible employee must be active on the last day of the plan year to receive a company plan contribution.