Need to implement 1 year wait period for 403b company match

I am trying to set up 403b plan so that employees will not be eligible/receive match until they have 1 year of employment.

Currently the plan is set up as contribution type Match Percent Schedule on BN15 because the company matches up to 6% of employee contribution with first percent being at 100% and the next five at 50%. Thus needing a percent match schedule set up on BN19.4.

I know I can control whose eligible by employee group, but I do not want to have to update the group each month to allow newly eligible employees in the group. I also believe once they are part of the group their 403 benefit would have to be stopped and restarted on BN32 to actually begin receiving match. All manually. I do not want to do this!

I tried setting up a new 403 plan with a contribution type of Match Limit Schedule which allows you to set up a match schedule based on years of service on BN19.3, but does not allow flexibility of adding a percent match schedule.

I feel certain we are not the only company that does this and I'm hoping that someone can provide me some guidance.

I appreciate any feedback.

Lisa

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Comments

unknown

Hi Lisa, I'd also be interested to hear whether there is probably a clever benefit set-up trick for doing this. Just in case there is not, what I'd do is code a custom calculation for the employer match deduction that looks at the employee's hire date, and zeroes out their match amount if they have not met the YOS requirement.

unknown

Hi pbelsky, thank you for your response.

How did you set up custom calculation based on hire date? I see the calculation type 'custom calculation' on PR05, but I do net see how to add criteria for the custom calculation.

unknown

Hi Lisa, there is a Lawson source code member called PRUEDED that is located in your prsrcprpdlib directory. This member is provided by Lawson for customers to add custom calculation routines using COBOL code for deductions where you have the "X" on PR05. So you do need to know a little bit about Lawson 4GL and the Lawson database to do this (or find someone in your IT dept who is willing to try and fake it

PR140 passes the employee number and deduction code into PRUEDED, and PRUEDED passes the deduction amount back to PR140. So in theory, when PRUEDED gets a company match deduction, you should be able to code a routine to look up the employee's hire date, do a calculation, and move zeroes to the deduction amount if the employee YOS requirement is not met.

PRUEDED is a COBOL copybook, so once you have coded the routine, you need to recompile PR140 and PR80, which pull PRUEDED in.

Hopefully, someone will come back with a benefit application pro tip for you to help you get your company match set up the way you want it to work. But if not, this is what I would try.

unknown

Hi pbelsky, thank you for the explanation. That's pretty nifty what you have done. I don't have the skill set to code this type of customization, but I have 2 very smart ladies on my team that can:)

I will definitely present this as an option.

Thanks again for sharing!

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