FAQ 892: ADP--Projections Testing how is compensation calculated?

Problem: How is the compensation calculated in an ADP projected test?

Solution: 1) Post Entry Comp in COMPDEF screen (i.e. ADP source UNchecked under question "Include Pre-entry Compensation")- ADP test uses the "Current Limited Post-Entry Comp" field in the COMP screen and divides it by the whole months from the DOE to the last day of the nonprojected period to determine the monthly comp. This determined monthly comp is then applied to the projected period. 2) Full Year Comp in COMPDEF screen (i.e. ADP source checked under question "Include Pre-entry Compensation")- ADP test uses the "Current Limited - 401a17" filed in the COMP screen and divides it by the whole months from the DOH to the last day of the nonprojected period to determine the monthly comp. this monthly comp is then applied to the projected period. See numerical examples below for period 1/1 to 6/30/10, projected to 12/31/10: SANDY SQUIRE (full year continuing participant) - DOH 2005, DOE 2006 Comp (24k/6)*12=48k, same result for both post entry and full year comps ANTHONY ROBERTS (new entrant and new hire) - DOH 2/15/2010, DOE 6/1/2010, Plan Comp 20k, Pre-Entry Comp 3k, therefore PostEntry Comp 17k. Post Entry Comp used: (17k/1)*7 = 119k (1 mo June). Full Year Comp used: (20k/4)*10 = 50k (4 months March, April, May, June) For more accurate projections, users may code the "Frequency is ee -specific" option in the ADP Projection setup screen, but then payroll info must be entered on the TESTPROJ screen for each employee. NOTE: Whether the answer is "Yes" or "No" to the spec "Pre-entry compensation input" is irrelevant. If Pre-entry comp is entered, it will be read and used to set the "Current Limited Post- Entry Comp" in the COMP screen, even if this spec is coded as "No". The Projected ADP will then read the limited full 401a17 or Post-entry comp values from the COMP screen and project from there based on the coding described above.