In general, each Plan Document in DB Precision includes at least 3 Service Definitions as shown below. You may notice that each of these types matches the types shown on the Service Definition screen. It is with these checkboxes that users can control which definitions are to have their amounts and eligibility dates included in the valuation extract.

• Participation Service: when most people think of plan participation, they think of it in terms of a date where Date of Participation is the date that an employee becomes a participant in a pension plan.

  In DB Precision however, participation is a Service Definition where Date of Participation for a plan is the earliest date that service for that definition begins accruing. In addition, Participation Service is used in the determination of the 415(b) benefit limitation.

• Vesting Service: Vesting Service is the service that is used to determine whether a plan participant is vested upon termination. It is worth noting however that it is not enough to simply designate a service definition as being Vesting Service. Vesting rules are defined on the Benefit Payment Set Provision (Vesting/Pre-Ret Death) screen and should reference this Service Definition in the formulas used.
• Credited Service: most pension plans include length of service in the determination of benefit amounts. This service is oftentimes referred to as either Credited Service or Benefit Service.

When setting up a plan, you need to think of the following:

• Service Type: is service accrual based upon length of time (elapsed time) or some other measurement (hours for example)?
• Eligibility: does service begin accruing on hire date or some other date (age 21 and one year for example)?
• Service at Conversion: if service is based upon some reported amount such as hours, do you have a full history of this amount?

For each service definition in a pension plan document, you need to determine whether each references some reported amount such as hours or whether they are based upon elapsed time. Based upon this, you should then choose Service Type on the Service Provision screen.

For elapsed time Service Definitions, you will need to choose from the many Calculation Method options. Oftentimes, calculation method is not explicitly described in the plan. It may be quickest to determine Calculation Method using trial and error by picking different methods and then comparing the calculated service to previously calculated amounts.

For Reported Amount Service Definitions, you should first determine which Reported Amounts in DB Precision are used for service accrual and then specify how those reported amounts are to be converted to service units on the Service Provision Reported Amount screen.

Note that some definitions specify different allocations for first, middle, and last periods. In such situations, you will need to add multiple rows to the Reported Amounts list for each separate allocation rule and then vary the parameter, Periods Receiving Allocation.

While many Service Definitions begin service accrual for participants on hire date, some do not. In this case, you will need to add an Eligibility Provision on the Service Definition screen and then specify eligibility rules on the Service Eligibility screen.

For most Reported Amount Service Definitions, there are at least some employees where some of the Reported Amounts that are needed to properly calculate service amounts are unknown. For such plans, one could go back to the sponsor and get a full history of the Reported Amount. This can delay plan coding however, so the more common solution is to use a service override for this group of employees.

Specifically, a new Reported Amount would be set up and override amounts would be imported as of which the date which these amounts are unknown. For example, if a plan has hours history back to 1/1/2000, but there are people hired prior to this date, you should import override amounts for those participants as of 12/31/1999.

You should then check the box Override accumulated service with and then select the newly created override Reported Amount on the Service Provision screen. For any participant with this override amount, all calculations of service prior to the stop date of the latest Reported Amount will be disregarded and instead, the override amount will be used. Going forward after that stop date however, the Service Provision's rules will apply.

You should avoid using overrides for all participants. Part of the process of checking DB Precision calculations is to compare to previously calculated amounts. If you use overrides for all participants, you will not be effectively checking DB Precision results.