FAQ 459: Coding terminated participants

Problem: I put in a termination date for my terminated employee. What other coding changes do I need to make for this participant?

Solution: The following information should help you understand the changes needed to update your terminated participant's record in their Employee \ DATE screen. Date of Termination - you will need to enter the Date of Termination. If the date of termination is within the 12 months preceding the valuation date, the system will recalculate the average salary and the benefit based on how plan specifications are coded for treatment of termination year. Status - The DB system requires you to change a participant's status code to T or M when a person terminates. Currently, T and M are the only Deferred Vested status codes that are valued. Nonvested terminees should be coded as Status N. Status code P should be used for participants paid out of the plan before the valuation date. If a terminated participant benefitted for the 12 months before the valuation and was paid out of the plan, status code P will have their benefits updated for compliance testing during Calculations > Valuation. Participants with status codes N and P will only appear on the inactive census list and will not have their liabilities recalculated during Calculations > Valuation. For the Cash Balance Summary report, there is an option to include participants who have status code P for the plan year but do not have status code P in the prior HISTORY year. Review the DB Reference Manual, Chapter 2 - Employee Data for additional information on how terminated status codes are used in valuation calculations and compliance testing. In the Calculations > Valuation window, there are options to select which assumptions you wish to use in the Retired and Vested Valuation section. The default for this is Use Funding Assumptions which will calculate funding liabilities for both PPA and pre-PPA funding purposes. Present values for terminees will also be calculated for all the other assumption sets including Actuarial Equivalence, 417(e), FAS/ASC-715, Top Heavy, and PBGC Premium.