Glossary of terms used in PSPA Application, Pension Plan Documents, and PSPA Technology.
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A
- Account
- A balance of the accumulated amounts of either employee and/or employer contributions or benefit accruals. An account is a member-specific accrual that is assigned to one specific member or participant.
- Actuarial Equivalence
- A benefit having the same present value as the benefit it replaces. Also, the amount of annuity that can be provided at the same present value cost as a specified annuity of a different type or a specified annuity payable from a different age.
- Actuarial Factor
- A factor that can be applied to one form of benefit to convert to another form. Actuarial factors typically depend on specific interest and mortality assumptions.
- Actuary
- A person who calculates the employer liability and budgets for funding and spending pensions for retired workers. Actuaries file government forms that value and state the finances of the pension plan.
- Adjustment
- Modify a system value by entering an amount that increases or decreases a system value.
- Alias
- Name used to describe a variable in PSPA. There are many types of Aliases.
- Annuity Benefit
- A series of periodic payments that typically continue for the lifetime of the participant.
- As of Date
- The As of Date is a calculation input parameter. This field defaults to today. The As of Date on the calculation drives the selection of Effective Dated rules.
B
- Benefit Commencement Date (BCD)
- Benefit Commencement Date is the date that a Retiree will commence benefit payments. This can be later than the Termination Date and there may be conventions on determining this value (first of month after termination).
- Benefit Plan
- System configured value unique to each implemented Benefit Plan, including Pension Plans.
C
- COBOL
- Programming language used to develop the Periodic Process and Calculation for PSPA.
- COBOL Copybook
- A COBOL file that contains data definition, variable names and hierarchy, used to store data in memory while the program is running.
- COBOL Executable
- One of the main COBOL programs that can be called from Process Scheduler.
- COBOL Program
- A COBOL file containing the procedural code for completing a process. The program reads in run control, member, and configuration data to determine the flow of the program.
- Calculation Name
- Each instance of a calculation request needs to be given a unique name. Usual a naming convention is used that includes the EMPLID, User, Date, Reason, etc.
- Calculation Reason
- A configurable value that describes why a calculation is being performed. The calculation rules may be configured use different rules based on the calculation reason.
- Contributions
- A rate of pay or a flat rate that is allocated toward the plan from the participant’s salary. Some plans are contributory, requiring contributions from participants and some plans are not, only depending on funding from the Employer. Employer payments can be referred to as Employer Contributions.
- Credits
- An interest amount, a time period or any other factor of the benefit calculation that is allocated toward a participant’s account.
D
- Date of Birth (DOB)
- Dates of birth for participants, annuitants, and beneficiaries are used in Pension calculations.
- Date of Death
- Used to computed Death Benefits or start Survivor benefits.
- Death Benefit
- A retirement benefit payable to a designated beneficiary upon the death of a participating member of the plan. Death Benefits are typically controlled by specific rules that are defined by the plan.
- Delete and Rebuild Mode
- This mode deletes all of the historical consolidation data and re-consolidates all of the data starting at the member’s Original Hire Date.
- Disability Benefit
- Retirement benefit that plan participant is entitled to receive when the participant is deemed permanently disabled. The rules about the disability designation and the disability benefit calculation rules are designated by the plan.
E
- Earliest Retirement Date (ERD)
- Earliest Retirement Date is the first day a participant may be eligible to commence payments from the plan. Earliest Retirement Date may be before the Normal Retirement Date.
- Early Retirement Factor (ERF)
- The percentage of the benefit is reduced by, for an individual retiring prior to the Normal Retirement Date. a conversion rate that reduces a benefit for the period of time that the benefit is discounted. This factor would typically be between 0 and 1.
- Effective Date
- Effective Date is a standard concept in PeopleSoft applications. Pension Rules are configured with Effective Dates and the Calculation Processes decide which rules to use based on the “As of Date” in the calculation inputs.
- Eligibility
- Specific rules that describe the requirements for participation. Eligibility describes who can participate in the Pension Plan.
- Eligibility Date
- Eligibility Date is the earliest date a participant can become member of an eligible class of the Pension Plan.
- Event Date
- The Event Date is typically the Last Day Worked. This date is applicable for Estimates when the member may not yet be terminated in the system.
F
- Final Average Earnings (FAE)
- An average of earnings defined by the plan document. This can be averaged by certain period count criteria or by the whole career of an employee.
- Function Result
- Primary building block of PSPA configuration that returns a single value, often supported by a collection of related data.
G
- Group Definition
- Configuration identifying a class of members. Used to configure the appropriate rules to be applied to the group.
- Group List
- List of EMPLIDs used for processing in batch.
H
I
- Immediate/Deferred
- An annuity that is payable at retirement age (immediate) or payments can be delayed until the participant elects to receive them. Deferred benefits can be larger than the equivalent immediate benefit, depending on the plan rules.
- Interest
- Money or credit amount that is paid or allocated for holding assets for a period of time. Interest can be paid for Employee Contributions on a prescribed schedule. Interest accrual rules can be simple or compound.
J
- Joint & Survivor Annuity (J&S)
- A Joint and Survivor Annuity is comprised of two benefits. The first benefit is paid to the participant for their lifetime. And at the event of the death of the participant, the spouse is entitled to a second lifetime annuity. The spousal or secondary benefit is typically some percentage of the primary benefit (e.g.: 100%, 75%, 50%, etc.). If the spouse dies before the participant, no secondary benefit is paid. Some Joint and survivors can have a pop up benefit if the spouse pre-deceases the participant.
K
L
- Leave of Absence
- A period of time (and a designation) that an employee is away from their regular job but maintains their employment status.
- Level Income Benefit (LIO)
- A Level Income Benefit option is designed to work in conjunction with a second benefit from another source. Under this option, the retiree would receive one benefit amount for a defined period, and then a lower benefit amount for the remainder of his lifetime.
This option works well in conjunction with Social Security Benefit payments. If a participant is due to receive $100 per month at 67 years old, but they want to retiree from employment at 65, they can elect a level income benefit to pay a full amount for the first two years and then an amount reduced by $100 for the remainder of their lifetime. This in conjunction with the $100 from Social Security will result in a level income amount for the lifetime of their retirement.
- Lump Sum
- A Lump Sum benefit is paid as a single payment for the entire retirement benefit. A lump sum is an immediate payment and is usually discounted for the time that plan assets will not accrue interest, as they would under a Life Annuity payment. Lump Sum payments offer the retiree the flexibility to manage their own money. Lump Sum Payouts are available under and/or over certain thresholds, depending on the plan rules.
There are also regulatory requirements around Small Benefit Cash-outs. Benefits that have an immediate value of less than $5,000 can be paid out by the company with no other options to the employee. This is done to help eliminate annual administrative costs of maintaining the benefit.
- Lump Sum Date (LSD)
- The Lump Sum Data can vary from Benefit Commencement Date for some plans. It can also be distinct for a specific plan in a case where a member is eligible for two benefits.
M
- Mortality
- A probability or risk that a person will die at a certain age. Mortality is typically represented in tables for all ages.
N
- Normal Processing Mode
- Adds concurrent rows to the existing data. This is the standard processing mode that would be used when the process is run after each payroll cycle.
- Normal Retirement Date (NRD)
- Defined by the plan rules as the earliest date a member could receive a full Pension Benefit usually determined as a function of Age and Service.
- Normal Retirement Date (NRD)
- The plan defined date that a participant can elect to receive benefits without reduction.
O
- Original Hire Date
- Beginning of earliest employment period.
- Override
- Value entered to replace a system value for purposes of the process being requested. Entering an override may cause the process to skip the logic normally used to resolve the value, and use the entered override instead.
P
- Participation
- The act of qualifying, and sometimes making an election, to participate in a plan. Participation describes when members can participate.
- Pension Benefit
- The annuity that the participant is entitled to at retirement. In a defined benefit plan, the future-payable amount is referred to as the Benefit, even if the participant is not yet eligible to receive it.
- Pension Plan
- A scheme for retirement benefit provisions that is fully described by a pension plan document.
- Period Certain
- A Period Certain Benefit option provides a reduced monthly benefit the lifetime of the retiree with payments guaranteed from retirement date for a certain number of years to a contingent annuitant. If the retiree elects a 10-Year Certain Benefit and deceases after five years of retirement, the designated contingent annuitant (beneficiary) would continue to receive benefit payments for the remainder of the certain period (five additional years). Period Certain benefits can be combined with other benefits such as a Life Annuity.
- Periodic Process
- PSPA process run regularly during a members employment to collect and process data for Pension. Includes eligibility, participation, earnings, hours, contributions, employee and cash balance accounts, service, vesting, and pension statuses.
- Plan Implementation
- Ordered list of Function Results to be processed and resolved to complete a PSPA Process for a particular Pension Plan.
Q
R
- Retirement Benefit
- Payment that the participant is entitled to receive at Normal Retirement Age. Retirement Benefits are typically defined as an annuity, but can be converted to other forms available through the plan.
- Run Control
- Page/Record to collect the inputs for a Process.
S
- Service
- Service is the counting of time that an employee (participant) rendered an hour of work usually expressed in periods of years and months. As defined by the plan document, the status of being employed for a year. This can be counted by minimum number of hours worked, period of active employment, or other terms defined by the plan document.
- Single Life Annuity (SLA)
- Single Life Annuity is a form of benefit payment that is payable to the participant only for their lifetime. Under a Single Life Annuity, no benefits are payable to any beneficiary after the death of the retiree.
T
- Termination Date
- Termination Date is the date the employee separates from service from the company (not necessarily from the plan).
- Trustee
- Usually a financial institution that holds and distributes funds on behalf of the plan. The Trustee has the legal obligation to administer assets for the plan participants’ benefits.
U
V
- Vesting
- Vesting means being entitled (i.e. having the right) to a benefit. The vested benefit is the portion of the employer’s contributions which is paid to the participant. A participant is said to be “vested” when there is a minimum service period to receive a refund of the employer contributions in full. Plans can have various vesting schedules including 100% immediate vesting, incremental schedules that afford percentages of vesting each year of participation and cliff schedules that offer 0% for several years and then 100% at the cliff year.
W
X
Y
Z
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