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 have the system calculate an expected accrual for a participant who reached Normal Retirement in a BOY valuation, make the following changes in the Employee: Basic Data \ DATE screen: 1) Change their DATE \ Date NRA Attained and Normal Retirement dates to the next valuation date. For example, for a BOY plan with a 1/1/2024 valuation date, change the postponed retiree's Date NRA Attained and Normal Retirement dates to 1/1/2025. 2) Set their DATE \ Participation Status to A to prevent the system from recalculating dates during valuation calculations 3) Run Calculations > Valuation After making those changes, the system will calculate their Costs \ LIABILITY \ EOY Accrued Benefit based on the plan formula and increase their DATE \ Total Accrual Years to include the current plan year. The system will not calculate an actuarially increased benefit for postponed retirees with this coding. If the actuarially increased benefit you calculate is larger than the salary and service benefit, set Plan Specs: Compensation \ COMPAVG \ Benefit Add-ons to '2 - Forced Minimum Benefit' and input the following values in the Employee: Benefits \ PROJBENF \ Add-on to fields: a) Input the actuarially increased benefit calculated as of the end of the year in the Projected Benefit and Funding Benefit fields b) Input the actuarially increased benefit calculated as of the beginning of the year in the Accrued Benefit field For information on how to code the system to actuarially increase benefits for postponed retirees, refer to FAQ 817: http://faq.asc-net.com/CSCarticles/Defined%20Benefit/FAQ817_Coding_a_Postponed_Retiree.htm