The Covered Compensation Provision (Cov Comp Prov) Screen is used to define the specifics of how to calculate Covered Compensation, including the Law Year of the table and rounding of the result.

Multiple Covered Compensation Provisions are needed if the specific set of Covered Compensation requirements vary through time, with each provision defining the set of conditions for a given time period.

• Effective Period: details the period of time for which this Covered Compensation Provision applies. The Effective Date is the start of the first period these particular parameters are applicable and the Stop Date is the end date. If the provision continues to apply without an end date, check the None box for the Stop Date.
• Year of Final Taxable Wage Base: space to indicate whether the calculation of Covered Compensation should follow the Pre-TRA, Transitional, or Post-TRA rules. Choose Year Before Age 65 (Pre-TRA), Year Before Social Security Retirement Age (Transitional), or Year of Social Security Retirement Age (Post-TRA).
• Lookup Method: area to specify what age variable to use when looking up Covered Compensation for this table. Choose Lookup value using year of birth (standard), Lookup using fixed age, or Lookup value at Social Security Retirement Age.
• Law Year: for defining whether Covered Compensation is to be determined using the Social Security Taxable Wage Base as of a fixed determination year or whether it is to be determined on a variable basis using wage bases that change each year as the wage base is updated. Choose one of the following:
• Fixed Year: select if Covered Compensation should be calculated using the Social Security Taxable Wage Base as of some fixed year. In the box provided, enter the year upon which wage bases were frozen for the purpose of this calculation.
• Variable Year: select if Covered Compensation should be calculated using Social Security Taxable Wage Bases that change each year as the wage base is updated.
• Lookback: for use when Covered Compensation is determined on a variable basis, but uses the wage base for a set number of years prior to the current year instead of the current year's wage base. Enter the number of years prior (i.e., the lookback) here.
• Start of Year: specify the Month and Day of the date upon which a new year begins for purposes of calculating Covered Compensation. For example, if a plan specifies that wage base information for purposes of calculating Covered Compensation is to be updated every October 1, the user should enter 10 in the Month field and 1 in the Day field.
• Rounding: select the type of rounding you wish to apply to the result of the Covered Compensation calculation. Choose one of the following:
• None: applies no rounding to the calculated value.
• Lowest $12: rounds the unrounded calculation to the next lowest $12.
• Nearest $600: rounds the unrounded calculation to the nearest $600.
• Nearest $3,000: rounds the unrounded calculation to the nearest $3,000.
• Table: use the blue Table button to view the Covered Compensation table determined using the above parameters.