The topic U.S. Covered Compensation Parameters defines which U. S. Social Security Covered Compensation table to use (either for all plan participants or varying by participant according to Social Security Normal Retirement Age) and when to end the 35-year averaging period for computing covered compensation for this custom operator. The standard operator is a table based upon: U.S. Social Security maximum taxable wage bases through the calendar year of the valuation date and increasing thereafter, and an averaging period ending with the calendar year in which the participant attains Social Security Normal Retirement Age (SSNRA).

This is not the dialog box in which you indicate how to round covered compensation; that is done in the Plan Attributes dialog box within Plan Definitions.

35-year averaging period ends with indicates the calendar year of the last wage base to be included in the averaging period for computation of covered compensation. It can be the year of attaining Social Security Normal Retirement Age (SSNRA), the year immediately prior to the year of attaining SSNRA, or the year in which the member attains a specified age.

Wage base increases reflected through indicates how to determine the calendar year through which wage bases are assumed to increase: the year of decrement, a specified number of year(s) before decrement, the earlier of year of decrement and a specified freeze year (constant or scalar numeric data dictionary field), or the earlier of year of decrement or a specified number of years prior to the year of attaining social security normal retirement age (SSNRA). For example, to use the 1993 covered compensation table (i.e., the table that uses the 1993 maximum taxable wage base for all years subsequent to 1993, equivalent to “wage base increases reflected through 1993”), enter 1993 as the freeze year constant. If instead you wish to reflect wage base increases through, for example, 10 years prior to SSNRA, enter 10 as the years prior to SSNRA.

The Wage Base parameter allows you to specify the applicable wage base regulatory data as either the default U.S. Social Security Wage Base (from the file RegWageBase.txt) or a Custom Regulatory Table that was specified as a wage base type. To specify a custom table, either select from the list of tables unhidden in the current Project, or click the button to edit a table or create a new one. For estimated benefit calculations the wage base will be projected in accordance with the option selected and the values entered as increase rates, under the Regulatory Data Increase Rates of the Projection Assumptions.

The Wage base salary limit parameter allows you to limit the specified wage base to a salary limit, or to apply no limit (by selecting “<none>”). Alternatively, you may specify a custom regulatory table of either the wage base or the compensation limit type. To use a custom table, either select from the list of tables unhidden in the current Project, or click the button to edit a table or create a new one. Depending on the parameters selected under the Projected Assumptions, it is possible for projected wage bases to exceed the projected U.S. Internal Revenue Code section 401(a)(17) maximum compensation. Using this parameter to limit the wage base to the 401(a)(17) maximum compensation amount will avoid this result.