The Benefit Payment Set Provision - Employee Contributions Screen allows users to specify how the employee-paid portion of the accrued benefit is defined in the plan.

• Contribution Accounts: area to specify which accounts in total make up the total employee contributions for the plan.
• Benefit Determination: edit items related to the determination of the Employee Contribution portion of the benefit.
  
  
  • Benefit Determination Method: choose from the following options which method is used determine the employee-paid portion of the benefit.
  • No employee-paid benefit: choosing this option indicates that there is no employee-paid portion of the benefit and that it is all paid for by the employer (use this option of the plan is not contributory).
  • Divide balance by annuity factor: choosing this option will result in an employee paid benefit that is equal to the account balance on the account determination date divided by an annuity factor. This annuity factor should generally be a deferred factor (to Normal Retirement Date) as it defines a benefit that is then treated as a benefit at Normal Retirement Date.
  • Accumulate to NRD and convert: use this option if the account balance should be accumulated to Normal Retirement Date with interest (no mortality) and then divided by an immediate factor at Normal Retirement Date.
  • No remaining benefit: if this option is selected and employee money is withdrawn, there is no employer benefit then payable. This option is sometimes used for municipal plans.
  • Employee Benefit Conversion Factor: if the employee-paid portion of the benefit is determined by accumulating the contribution balance to Normal Retirement Date, this area allows you to define how this accumulation is to be done. Select either the Annuity Factor Definition or Formula Derived Item used to derive the benefit.
    
    
    • Reduce benefit by early reduction (if applicable): reduces employee-paid benefit by applicable early retirement factor. If person is not retirement eligible and this checkbox is checked, the employee-paid benefit will be $0.
    • Total Benefit Value (for non-taxable split): when determining the non-taxable portion of an annuity, DB Precision needs to compare the balance of post-tax contributions relative to the total value of the gross pension benefit. This section allows the user to define the Annuity Factor Definition and Determination Method for this gross benefit value.
  • Do not treat employee-paid benefit as a minimum: if employee-paid benefit should not be treated as a minimum benefit payable, check this box (rarely used).
• Interest to NRD:
• Interest Rate: area to specify either a fixed or variable rate to accumulate the balance to Normal Retirement Date.
• Variable Interest Rate Parameters: when variable rate interest is chosen for the accumulation of the balance to Normal Retirement Date, this area allows users to specify how this variable rate is determined.
• Rate Reset Frequency: indicates how often rates are to be reset.
• Number of Lookback Months: if rates are not determined using rates on the calendar anniversary (see below), this space allows you to indicate how many months prior to this anniversary that rates are to be used. For example, if a plan resets every January but uses November rates, a two-month lookback would be specified here.
• Rate Adjustment: if rates are to be adjusted, specify the adjustment ratio here. For example, of the rate was to be increased by 10%, then you would enter "1.1" here.
• Calendar Anniversary: area to specify the month and day of the start of the year that rates reset.
• Interest Accumulation Method: choose from Simple Interest or Compound Interest to specify how interest is to be accumulated for partial periods.
• Rounding of Accumulation Period: when accumulation periods are not exact years, this area allows users to indicate how accumulation periods are to be rounded.