FAQ 695: Earnings-Splitting earnings across sources for segregated accounts

Problem: I have a plan where all the participants have segregated accounts. The plan has three types of money: employer, employee, and safe harbor employer. Is there an easy way to input one earnings figure per participant and have it spread the earnings over all the money types for that individual participant?

Solution: You have to use a combination of the fund spec coding, and a special utility, to allocate the fund earnings across the three sources of money. Initially, you will want the Earnings Definitions for the non-paid out employees set to either 1-Prior Account or 7-Time Weighted Trans. Unless you are inputting all account activity as transactions, and want the system to assign individual weights to each piece of activity, you would most likely choose the "1-Prior Account" option. With that option, in addition to the earnings being allocated based on the prior balances, any weights that you have coded for the contributions, withdrawals, and transfers in the source specs will also be taken into account when determining the earnings allocation base. Once the fund specs have been coded and you are ready to allocate the earnings, you would choose Calculations, Fund Calcs and Interest from Balance to allocate earnings for the individually-directed accounts. This utility allows you to either input earnings or an ending balance and the system will split the earnings across the sources. It also gives you the option of storing the earnings directly to the Account Values screen(s) or saving them as transactions. I would strongly recommend that you save the calculated earnings as transactions so that they can be backed out or re-processed if necessary, and so that you have a record of the calculated earnings broken down by source. Read the on-line Help for this utility for field coding, especially the sections regarding how to code your plan specs before and after running this utility so that earnings are not wiped out after the utility is run. Basically, once the utility has been run and the earnings are allocated, you will want to set the Earnings Definitions to "D-Input (Total Account)" so that they will be maintained if you run calculations. To access the on-line Help, simply hit the F1 key or click on the "Help" button when viewing that utility's setup screen.