; FAQ 521: Coding Part-time employee

FAQ 521: Coding Part-time employee

Problem:

An individual used to work more than 1000 hours per year and thus became a participant in the plan. The individual no longer works more than 1000 hours per year and is not expected to work 1000 hours per year in the future. The plan requires that a participant work 1000 hours to earn a year of benefit service and to earn a year of vesting service. What is the best way to code this person in ASC?

When I code them as an "A", the system seems to assume that the participant will earn 1000 hours per year in the future. If I code the individual as an "H" for part-time, the system drops them out of the valuation.


Solution:

Coding a participant with A status and leaving their Hours field blank will cause the system to treat the participant as working 2,080 hours which will generally result in an increase in service and benefit accruals.

Coding a participant with H status will cause the system to not run the participant through Calculations > Valuation or compliance tests.

There may be more than one way to code a part time participant to be reflected in your valuation but not earn additional service.

The preferred way would be to leave the status code as A and code in the actual number of hours worked (or some appropriate number less than 1000) in each applicable HISTORY record and in the DATE screen \ Hours field.

Other ways would require additional details regarding the specific case.

For BOY valuations, in Plan Specifications: General \ Compensation \ COMPAVG screen, code "Assumed Continuation at Same Hours/Yr" as Yes to assume that in all future years, including the current year for the accrual for the PPA Target Normal Cost, the participant will work the same hours as input in the Hours field on the DATE screen. If you have other people in the plan that are working less than 1000 hours in the prior year, but you want to assume that they are assumed to befull time in the future, then keep Plan Specification setting Assumed continuation @ Same Hours/Yr set No and set the specific participant who will continue working less than 1000 hours to Status T so they do not earn additional service. Consider making a note in their NAME screen, Notes field to document this approach.