FAQ 944: Coding a postponed retiree who receives added service credit

Problem:

In my beginning of year plan, I have a participant who reached his Normal Retirement date on the valuation date and worked over 1000 hours during the prior year, and I want him to accrue a benefit during the plan year following the valuation date. How should I code the plan?


Solution:

To increase his total accrual years and allow him to have an increased benefit at the end of the year, you need to change both his Date NRA Attained and Normal Retirement date to the next valuation date. Be sure his primary status is A so these dates won't be recalculated when valuation calculations are run. The system will calculate an end of year benefit based on the plan formula. Note that the system will not calculate an actuarially increased benefit with this coding.