Defined Benefit Pension System

1. Defined Benefit Pension System for Valuations Administration Proposals

2. System Demonstration NEXT Press Next to view entire demo Or click to advance to individual chapters: System Layout and Navigation Plan Level Screens Source Level Screens Employee Level Screens Reports

3. EMPLOYEE BENEFIT SYSTEMS, INC. Part 1: System Layout and Navigation

4. There are generally three ways to accomplish any task in the Pension System. The choice is yours!

5. 1. Folder View Click on any screen name on the Folder View “tree” to go directly to that screen.

6. Additional List Bars take you to Activities, and Reports. Calculations, 2. List Bar

7. 3. The Command line Just a few of the commands: File User-friendly Import/Export utility lets you build data handling templates. Instantly retrieve recently accessed plans.

8. Go takes you directly to screens

9. Hey, Hot Key fans: Did you notice our hot keys?

10. Besides letting you “Calc the Plan,” Calculations includes… Loan Amortization program & Rate of Return calculator

11. Choose from dozens of • reports in the following • categories: • Proposals • Valuation • Discrimination Testing • Participant Statements and more. Or use the optional Report Writer to create your own!

12. In addition to these navigation methods, the Pension System has a Tool Bar to speed access to commonly used Functions. Search string If you are at the Plan Level, the Search Tool helps you find a plan Finds sponsor Pick a plan Pick a Plan Year

13. If you are at the Employee Level, the Search Tool helps you find an employee

14. In the same way, the New Tool will help you add a new plan or a new employee.

15. The Calculator Tool lets you process any data entered and determine eligibility and vesting for each employee. It will also update the plan to the next period or year.

16. EMPLOYEE BENEFIT SYSTEMS, INC. Part 2: Plan Level Screens

17. The Defined Benefit System has three main levels. The Plans Level The Sources Level The Employees Level

18. Information for each Level is organized on screens accessed by horizontal tabs… with subcategories for each on vertical tabs.

19. We will start at the Plans level with the Plan/Sponsor – Plan/Trust screen We will start at the Plans level with the Plan/Sponsor – Plan/Trust screen

20. One of many drop- down boxes This screen has basic identifying information

21. Or press the F1 key For detailed Help. Roll cursor over fields for “tool tips” Basic identifying information

22. Tracks years in which Plan was Top Heavy, At Risk, and the 430(h)(2)(A)EIR The Plan/Sponsor – Dates screen The Plan/Sponsor – Dates screen Most DB plans are processed annually, but if there are more frequent transactions, they must be set up here. Dates roll forward when the plan is calculated and “Update To Next Period” is selected.

23. The Plan/Sponsor – Sponsor screen The Plan/Sponsor – Sponsor screen Note that you may attach multiple plans to the same Sponsor and the census data is shared by all plans under that sponsor.

24. The Advanced button offers full flexibility in defining eligible groups The Provisions – Eligibility screen The Provisions – Eligibility screen • Set up plan eligibility including: • Computation period • Included and excluded classes • Determination of Years of Service

25. The Provisions – Comp screen The Provisions – Comp screen and the component parts of comp that will be excluded. Here you define the compensation period…

26. Check exceptions to rule. Note the “Current Compensation” option… useful for Accumulation Plans. The Provisions – Avg Comp screen The Provisions – Avg Comp screen Define Average Compensation and the period to which it applies.

27. The Provisions – Limits/TH screen The Provisions – Limits/TH screen Defines annual dollar limits and adjustments for Top Heavy plans. Also includes exceptions for Cash Balance and nonqualified plans.

28. NOTE: System uses separate definition for eligibility and for vesting. The Provisions – Vesting screen The Provisions – Vesting screen This is not for the vesting schedules! We’ll find them on the Sources Level. Here we have the requirements for vesting service and the exceptions resulting in immediate vesting… also forfeiture handling.

29. The Provisions – Ret screen The Provisions – Ret screen Setting the criteria for Normal, Early and Postponed Retirement. Also defines the start date for Minimum Distributions.

30. The Assumptions – Pre-Ret screen The Assumptions – Pre-Ret screen This screen is used to enter pre-retirement assumptions for determining actuarial equivalent benefits under the plan as well as for funding and FAS reporting.

31. Check options allowed by the Plan and enter the probabilities of election at retirement. As with the pre-retirement assumptions, these are used for determining actuarial equivalent benefits under the plan as well as for funding and FAS reporting. The screen lets the user enter actuarial assumptions that pertain to the calculation of the individual monthly benefit at retirement.  These assumptions will appear on the schedule of benefits. Normal form of payment with spousal Setback The Assumptions – Post-Ret screen The Assumptions – Post-Ret screen

32. The funding segment rates may be downloaded from DATAIR’s website each month.

33. The Assumptions – 410b/401a4 screen The Assumptions – 410b/401a4 screen This screen sets the plan provisions for non-discrimination and coverage testing including combined plans and Cash Balance Plan testing.

34. The DB -- Min/Max screen The DB -- Min/Max screen The minimum required contribution and the maximum contribution levels as well as the development of the actuarial value of plan assets are developed and shown on this screen. The fields in gray are calculated by the system from input on Plan, Source, and Employee screens. If overridden they turn bright blue as shown above.

35. The DB -- Prefunding screen The DB -- Prefunding screen The data regarding the Carryover Balance and Prefunding Balance for the prior plan year.This information is used on the Form 5500 Schedule SB and will transfer directly to that schedule in DATAIR’s Pension Reporter System.

36. The DB -- Shortfall screen The DB -- Shortfall screen Shortfall and Waiver amortization installments are entered into the grid. The system then calculates the current year amounts using the amortization factors.

37. This screen is the source of Schedule SB attachment data. Enter dates and amounts of current year contributions, carryover and pre-funding balances, plus unpaid contri-butions. Enter proposed date of deposit, and system will calculate pro-posed deposit. The DB -- Contrib screen The DB -- Contrib screen

38. The DB -- Shortfall screen The DB -- Shortfall screen The plan's AFTAP and FTAP percentages are calculated and displayed. Tool tips display the calculations and where the numbers are reported.

39. EMPLOYEE BENEFIT SYSTEMS, INC. Part 3: Source Level Screens

40. The DB -- Shortfall screen The DB -- Shortfall screen A DB Plan will typically have one source type “Defined Benefit.” You may select additional types for rollovers, Cash Balance Plan hypothetical accounts, and mandatory employee contributions, etc. Shortfall and Waiver amortization installments are entered into the grid. The system then calculates the current year amounts using the amortization factors.

41. Entry date options Service crediting The Eligibility -- Participation screen The Eligibility -- Participation screen The entry requirements to become a participant in this source.

42. If your plan had a prior vesting schedule, enter the date here… and complete the schedule here The Vesting – Regular/Top Heavy screen The Vesting – Regular/Top Heavy screen Vesting schedules (regular and Top Heavy) are defined on this screen. As we already saw, the vesting service definitions and exclusions are defined at the Plans|Provisions|Vesting screen.

43. Choose Graded for any class tiered formula. Define the formula for each class using the fields and operators below Choose Accumulation for Cash Balance Plan formulas We think you will be impressed by the flexibility to design complex formulas The Benefit – Benefit Formula screen The Benefit – Benefit Formula screen Defines the Normal Retirement Benefit formula.  This formula and the accrual method selected on the Accrued Benefit tab are used to calculate the accrued benefits under the plan.

44. EMPLOYEE BENEFIT SYSTEMS, INC. Part 4: Employee Level Screens

45. The Census – Employee screen The Census – Employee screen The employee census information may be entered on this screen, or imported. Social Security Number and Employee Number are not required unless you import census data. Note that system will determine HCE status unless overridden.

46. The Census – Service screen The Census – Service screen Year of Service and hours worked for various purposes are calculated. Overrides may be entered. For participants receiving distributions, details of the payout schedule and amount may be entered.

47. code to identify family members for aggregation rules For RMD Calcs. The Census – Addr, etc. screen The Census – Addr, etc. screen Participant address and beneficiary information.

48. Step 1. Use the Add button to move field definitions from Available to Selected. Step 2. Use the Up and Down buttons to position fields. The Census – Edit screen The Census – Edit screen This screen is a powerful and friendly utility that lets you quickly create spreadsheet employee listings, data entry forms, and export files.

49. Enter information for selected employees Drag this bar to freeze columns to its left. Instantly re-sort the listing by clicking on any column header Export grid as either an Excel file or a .csv file

50. The system lets you input, import, and override payroll data in a variety of ways. Because the employee data is held at the Sponsor level, you only need to import once for multiple plans. The compensation definitions at the Plan level will automatically calculate the correct comp for each plan for testing and valuation purposes.