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Setting up benefit savings plans

Example: Setting up a savings plan using a rate table

This example shows how to set up a 401(k) savings plan with an employer match. To be eligible for this savings plan, an employee must be a regular full-time employee with at least 180 days service with the employer.

Based on the percentage of their salary that employees contribute, the employer makes matching contributions:

  • For the first 4% of the employee's salary contributed, the employer matches 100% of the contribution ($1.00 for each dollar).
  • If the employee contributes 6% of their salary, the employer matches 100% of the first 4% and 50% (50 cents for each dollar) of the remaining 2%.
  • If the employee contributes 8% of their salary, the employer matches 100% of the first 4%, 50% of the next 2%, and 25% (25 cents for each dollar) of the remaining 2%.
  • If the employee contributes 15% of their salary, the employer matches 100% of the first 4%, 50% of the next 2% and 25% of the next 2%. The employer will not match on any contribution above 8%.

Because we have to specify the rates for employee contributions and employer matches, we need to set up a rate table before we set up the savings plan.

  1. Select Setup > Codes > Employees > Benefits > Rate Table Setup.
  2. On the Benefit Rate Table Setup page for Employer, select DEU (for US sample data) or DEC (for Canadian sample data).
  3. Click Add.
  4. On the Benefit Rate Table Setup Detail page, enter 401(K) for Code and 401(k)/Employer Match for Description.

  5. On the Column 1 tab:

    1. For Column Heading, enter Employee %.
    2. For Column Match Types, select Cumulative (that Sage HRMS will apply the correct employer match to the correct percentages the employee contributes).

    3. For Column Expression, enter the following expression to check the field that stores the percentage an employee contributes:

      BE.B_401EPCT

    Note: Since Sage HRMS only has to check for one condition (what percentage an employee contributes), you do not need to enter information on the Column 2 or Column 3 tabs.

  6. Click the Rate Table tab.

    Notice that the table includes a column labeled Employee %. Now you can set the order and rates for the different employee % contributions to the 401(k) savings plan.

When you set rates for the conditions you are checking for (in this example, the Employee %), you specify the order in which Sage HRMS checks the conditions and the rates it should use for those conditions.

  1. On the Rate Table tab of the Benefit Rate Table Setup Detail page, set up the first rate (employer match of 100% when the employee contributes up to 4% of their salary):

    1. Click Add.

      Sage HRMS automatically inserts the number 1 in the Order column of the first row.

    2. Press Tab (to move to the Employee % column) and enter 4.
    3. Press Tab (to move to the Rate column) and enter 1.00 (100% match).
    4. Press Enter to save this first rate (and move back to the Order column).

  2. Set up the second rate:

    1. Click Add.

      Sage HRMS automatically inserts the number 2 in the Order column of the second row.

    2. Press Tab (to move to the Employee % column) and enter 6.
    3. Press Tab (to move to the Rate column) and enter .5.
    4. Press Enter to save this second rate.

  3. Repeat the process, clicking Add for each new rate, until you've completed the rates for the example plan. The resulting table on the tab should include these numbers:

    Order Employee % Rate

    1

    4

    1.00

    2

    6

    .5

    3

    8

    .25

    4

    15

    0
  4. When complete, click OK to save the rate table and return to the Benefit Rate Table Setup page. Notice the 401(k) rate table was added to the list of rate tables.

Now that you have set up the rate table, you can add the 401(k) benefit plan.

  1. Select Setup > Codes > Employees > Benefits > Savings Plans.
  2. On the Benefit Savings Plans page for Employer, select DEU (for US sample data) or DEC (for Canadian sample data).
  3. Click Add. (If the system asks if you want to use the setup interview, click No.)
  4. On the Benefit Savings Plans Detail page, enter 401(K) for Code and 401(k) Plan for Description.
  5. On the General tab for Employer Contribution Type, select Percent.
  6. To use the 401(k) rate table you just created, double-click it in the list of Available Rate Tables. (Sage HRMS displays in the Employer Contribution Per Pay Period area.)

  7. Click the Standard Eligibility tab and enter the following information:

    • For Salaried/Hourly, select Salary and Hourly.
    • For Employee Type, select Regular Full-Time.
    • For Minimum Age, enter 0.00.
    • For Minimum Hours, enter 0.00.
    • For Min Days Employed, enter 180 because an employee must have at least 180 days of service with the employer to be eligible.
    • Select the Automatically Add To Eligible Employees check box.
  8. Click OK.