| FAQ 978: DB/DC Combo - Options for allocating DB cost |
Can you briefly describe how the DB cost is allocated in the DC/DB Combo report under each of the available options?
For a traditional plan, there are 2 options: Allocate the Input Contribution using a)the maximum FT and TNC, or b)the minimum FT and TNC.
First, for any inactive employees, status TMIRGD, (FT * vested % + TNC) will be allocated.
The amount allocated to them will be subtracted from the Input Contribution and the remainder will be allocated to active employees, status ABC, as follows:
(EE FT + EE TNC) * (Contribution being allocated)/(Total FT + Total TNC for all includible active employees)
For a cash balance plan, the above options plus two additional options are now available: Input Contribution/Account Balance, and Expected contribution.
If you choose Expected contribution, the DB cost for an employee will be the value in his/her Expected Contribution field on the CASHBAL screen. For TMI status employees, the vested percent will be applied.
If you choose Input Contribution, enter a value and choose Account Balance, the Input Contribution amount will be allocated based on the employee cash balance accounts.
For an EOY plan:
(EE Prior Balance + Earnings + Expected Contribution)*(Input Contribution/Total of the same fields for all includible EEs)
For a BOY plan:
(EE Prior Balance + Prior Contribution + Earnings + Expected Contribution)*(Input Contribution/Total of the same fields for all includible EEs)