HR-XML 3.0 Standards, 2009 September 23.
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HR-XML's Savings Plan Enrollment specification together with HR-XML's Payroll Instructions, Payroll Benefits Contributions, and Indicative Data specifications can be used in various combinations to support savings plan integration. The term "savings plan" is used broadly to refer to a category of programs under which participants accrue money in accounts typically funded through a mix of employee payroll deferrals and employer contributions.
Employer-sponsored savings plans are a common employee benefit in many parts of the world. However, there is much variation in plan design, regulation, and taxation.
HR-XML's specifications related to savings plans are flexible and intended to be useful in a variety of contexts. However, the specifications include optional features designed around specific plan types (for example, 401(k) and certain "non-qualified" plans in the U.S. market)
The key savings plan schema in the HR-XML 3.0 library is:
SavingsPlanEnrollment. Intended to support the communication of enrollment and election information for savings and defined contribution plans, such a 401(k) plans within the U.S. market.
Note
Payroll Instructions and Payroll Benefits Contributions are not included in the 3.0 release.
One of many possible savings plan integration scenarios is reviewed in the section called “Savings Plan: Supported Processes”. Implementers can use as many or as few of the HR-XML library components that pertain to their integration. The library components used in the scenario are described in the sections that follow.
Savings plan elections cover a variety of items such as:
- Payroll deferrals.
The HR-XML schema enables the capture of information about employees' payroll deferrals. Payroll deferrals are the most common contribution source available to participants to apply to saving plan investments.
A deferral is generally defined as an amount that an employee is able to receive as current pay, but that he or she elects to defer for later receipt as a distribution from a retirement plan or other tax-preferred account. Broadly speaking, employees that make deferrals reduce the amount of their pay that is currently subject to taxation and usually gain other tax benefits, such as the tax-free accrual of earnings on deferred amounts. Tax benefits depend on the type of plan and applicable tax law.
Regular pay can usually be deferred. Bonus amounts and other forms of pay also sometimes can be deferred.
- Contribution sources.
HR-XML's saving plans enrollment schema provides a means to capture information about contribution sources and "source groups." Contribution sources are what a participant applies when making allocations to specific investment options. Contribution sources include payroll deferrals, but can also include sources such as deferred bonuses and employer contributions. Different contribution sources sometimes are aggregated within groups for the purposes of making investment allocations as well as for specifying plan distributions. For example, a savings plan participant might combine all employee deferral sources (Base, Bonus) into a single contribution source group.
Note that while some plans organize contribution sources into groups, other plans may allow participants to make elections only with respect to individual contribution sources.
- Investment choices and allocations.
The HR-XML savings plan schema provides a means to capture participants' choices of investments and allocations of contributions to investments. Allocations typically are expressed as a percentage of a contribution source or source group.
- Plan distribution choices.
In the case of certain "non-qualified" savings plans offerred within U.S. markets, participants may be required to make certain elections regarding plan distributions at the time they make investment allocations.
- Designation of beneficiaries.
The savings plan schema also includes a component to communicate beneficiary information. Beneficiaries are those individuals that a plan participant designates to receive some or all of the participant's account proceeds in the event of his or her death.