How to setup a Pay Period Match calculation for 403B Plans

We are wanting to setup a per pay period match on our 403B plans. We are having trouble with the Match limit as it seems to work as a descending balance and when a staff member changes their contribution election, the PR14 puts out a new record and does not keep the current descending balance. Has anyone had success with Lawson calculating a pay period match with limits without a lot of manual work?

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sriman-shivakoti

Ours works. It is a descending balance and annually we have to create a new tab so a new company deduction is created for the current year calculation.

What exactly are you seeing?

Legacy Contributor

The descending balance works, but when a staff member changes their election during the year, the new PR14 record starts the descending balance over and does not account for matches previously calculated. We are thinking that we need to manually update the new PR14 with the correct remaining balance?

Legacy Contributor

Yes, we have a payperiod match on our 403(b) plan, and it works fine. We also allow Roth contributions and they are also eligible for the match. Our plan gives a 50% match on up to 6% of the employees salary. I've attached screen prints of how our plan is setup.

For our plan, the maximum match that any of our employees could receive in 2014 is $7,800. That is the Balance Amount that the system deducts from on the PR14 screen.

amy-willbanks

Hi Cyndie, do you allow employees to have an amount on one plan and a percent on the other plan? If so, how would that be entered on the BN32?

Also, if an employee changes their election during the year does the descending balance start over at $7,800?

Legacy Contributor

Hi Patty:

No, if an employee is making both a pretax and a Roth (aftertax) contribution, they both have to either be a Percent of an amount. They can't be mixed.

Our employees change elections many times during the year. When the new election is entered on the BN32 screen, the system stops the old match balance on PR14 and starts a new record. The new record does not start over at $7,800, the new record is the amount of the declining balance that is left. We do not manually key these changes on the BN32 screen, they are uploaded as a BN531 file, and then I run a BN531 job to process them.

One note -- the 403(b) and the Roth have to be set up on one plan -- it does not work if you are trying to set them up as two separate plans.

amy-willbanks

Thank you very much Cyndie! One more question. Since our descending balance does not seem to be working correctly do you have any thoughts on if it might be something that we are missing in our setup?

Legacy Contributor

Patty, I'm not sure what you could be missing on your setup? I'd be happy to talk with you off-line if you can't figure it out. Good luck!

Kelly Metzger-moris

Hi Cyndie, I'm curious as to whether your 403b plan permits the additional age 50 catch-up contribution of $5,500 and if so, does your plan give the match on that as well? If the answer is yes to the catch-up and no to the match, I'd love to chat with you regarding setup. Thanks in advance!

Legacy Contributor

We do allow the additional age 50 catch-up contribution. We use an indicator in the BSI Group Code on the tax tab of HR11. The match is not an issue because we only give a match on up to 6% of compensation. The maximum compensation for 2014 is $260,000 so the maximum contribution that would receive a match is $15,600.

amy-willbanks

We have our plan set up with the match (50% of the first 5%) and have noticed something interesting. When an employee chooses a dollar amount for their contribution and the system calculates what the % is; for example, if it comes to .0500946 the system does the match at .0250473 not just .025 like it should. Does anyone know if there is a way to get it to not allow so many decimal places when doing the calculation?

Legacy Contributor

@Cyndie: Do you have any issues with employees getting match on both their pre-tax and Roth contributions? For example, if I contribute 10% pre-tax and 10% Roth, I should only get 6% under our pre-tax match deduction code but our system tries to give me 12%--6% under each match deduction code, pre-tax and Roth.

Legacy Contributor

This is a shortcoming in Infor/Lawson which we have also experienced. We have submitted an enhancement request for it (Enhancement Request - 33510). It reads as follows (below). I'd appreciate an endorsement if you feel it captures (at least in part) your concern. Please feel free to review the entire entry for Workaround (the shenanigans we have to do in order to maintain mid-year changes) and the proposed solution. Regards, Bill

We currently have 4 unique deferred comp plan codes. There is a plan for pre-tax contributions for Carrier A and a second plan for Roth contributions for Carrier A. Then, there is a plan for pre-tax contributions for Carrier B and a second plan for Roth contributions for Carrier B. An employee can participate in any of the plans as long as s/he has a maximum of one pre-tax and one Roth enrollment. The employer offers a match of the employee’s contribution (which varies by union code of which there are nearly two dozen) on a dollar for dollar basis up to a maximum match amount. Depending upon the union (and often the employee’s seniority) the match ranges from $250/annually to $3,800/annually. The plan policy reads such that this match is a maximum match regardless of whether the employee makes pre-tax or Roth contributions and without respect to Carrier. When an employee chooses to participate by enrolling in a single plan (whether pre-tax or Roth or regardless of Carrier) the match amount is applied correctly. However, when the employee chooses to contribute both on a pre-tax and Roth basis (regardless of which Carriers are involved), the match is over-contributed since the Infor logic treats each employee contribution separately and thus, risks doubling the intended match depending upon the level of contribution the employee is making.

Here’s an example:

Suppose the employee enrolls into a pre-tax plan and also a Roth plan. In the pre-tax plan she chooses an annual contribution of $5,200 (contributed 26 times during bi-weekly pay cycles for a per pay period contribution of $200). In the Roth plan, she chooses an annual contribution of $2,600 (contributed 26 times during bi-weekly pay cycles for a per pay period contribution of $100). Further, suppose the employee’s union agreement allows for a $2,000 employer match on a dollar for dollar basis.

When these enrollments are created, the corresponding deduction codes on PR14 will have ‘100.000’ in the Amount/Percent field (representing the employer match is contributing 100% of what the employee contribution is) and the Balance Amount field will be populated with $2,000.00. If nothing is done to change the enrollments or the related deduction records, each bi-week a matching contribution of $300 will be made… $200 match on the pre-tax employee contribution and $100 on the Roth employee contribution. For the first six pay periods, all will be well since the employer will have match accumulated contributions of $1,800 ($300 X 6). The pre-tax match will have a balance amount of $800 and the Roth match will have a balance amount of $1,400. In Pay Period 7, the same aggregated $300 in employer match will be contributed and the intention of the plan policy is exploited allowing the employer to have received a total YTD match of $2,100 ($100 over the limit at that point). If nothing is done, this will continue until each match contribution balance is fully exhausted (for the Pre-tax this will occur in Pay Period 10, for the Roth contribution will be Pay Period 20).

The enhancement request is to allow configuration affording an “aggregation” across both contribution types as well as plan codes. Even if our current configuration were to combine the pre-tax and Roth contributions for a single Carrier into a single plan, the end result would remain the same.

bhillz

Has anyone written this up as a high priority software enhancement!?!?

If so, can we endorse it?

P.S. All allow for Catch Up deductions for those over 50.

Jill

I could not endorse this request. It appears in the section "to be archived" so the endorsement button is not available.

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