Author: Aditi Gupta, HCM Consultant, Namos Solutions
Among all the features that were released in Absence Management 23B, the following feature would definitely bring a sigh of relief to implementers, writing Fast formulas, catering for the custom pro-ration rules. Now there is no need to write the pro-ration logic using the Partial Period Formula, instead use the Predefined pro-ration rules. Although you can still use Formula to stick to previous functionality if none of the options predefined by Oracle are meeting the customer requirements.
Prior to 23B, we used to write the pro-ration logic either using the Partial Period Formula or appending the Accrual Matrix formula with the logic of pro-ration for any new hires/ leavers. In 23B, Oracle has provided certain rules, which we can select, and it would prorate the accrual based on the option selected without any Fast Formula.
In my opinion, this will be helpful for following reasons:
- It means less customisation, making the configuration less complex.
- It will be easy to understand and be maintained by clients.
The predefined rules are based on whether the accrual plan is Front Loaded or Incremental.
Scenario 1: Front loaded Plan
Following are the options available when the accrual plan is front loaded, each explained with examples:
- Based on Days spent in plan
In case of Enrolment or Unenrolment, the Accrual will get pro-rated based on the pro-ration factor calculated as per the logic mentioned above.
This one would calculate based on the number of days the employee was enrolled in the plan term and divide by the total number of days in the plan term to give a pro-ration factor.
Example: When Accrual Rate defined is 120
Enrolment – With start date of 18th May and plan term being of calendar year starting from 1/4/23.
Unenrolment – If unenrolment occurs on 31/12/23, then accrual will be pro-rated only for the number of days employee was enrolled into the plan.
2. Based on repeating periods, depending on coverage
This one would calculate based on the number of repeating periods the employee was enrolled. If the employee is enrolled in the middle of a repeating period, then if the coverage is more than half/less than half it would determine whether to include/exclude that repeating period into the pro-ration factor calculation.
Example: Accrual Rate defined is 120, Plan term is calendar year with start date of 1/4/23.
Enrollment:
- When Enrolment start date is 12th May, accrual calculation is 120* 11/12(number of repeating periods employee was enrolled/total number of repeating periods) = 110
- When Enrolment start date is 18th May, the accrual calculation is 120* 10/12 (number of repeating periods employee was enrolled/total number of repeating periods) = 100
Note: Since in the second case, coverage is less than half, it did not consider the month of May in the accrual calculation and only considered the remaining 10 months to pro-rate accrual.
Unenrolment: When the enrolment end date is 12/12/23, the accrual is calculated for six repeating periods, in which the employee was enrolled and it ignores the month of May and December where the coverage is less than half. Hence, Accrual = 120 * 6/12 = 60.
3. Based on repeating periods, excluding partial periods
This one is the same as above, except that irrespective of the coverage in the repeating period, partial repeating period will always be excluded. It would exclude the repeating period, if the employee were enrolled partially in the repeating period.
Example: In continuation to above scenarios
Enrolment: If the Enrolment start date is 12th May, then accrual is pro-rated based on only the full repeating periods employee is enrolled into, i.e., Accrual = 120 * 10/12 = 100
Unenrolment: If the enrolment end date is 18th October and enrolment start date is 1st April, then accrual is pro-rated based on the full repeating periods the employee is enrolled into, i.e., Accrual = 120 * 6/12 = 60.
4. Based on repeating periods, including partial periods
This one is this opposite of the above scenario. It will include all the repeating periods in the plan term for accrual proration in which the employee is enrolled into even if the employee is not enrolled for the entire duration in a repeating period.
Example: In continuation to the above scenarios
Enrolment: If the enrolment start date is 12th May, then accrual is prorated based on the full as well as partial repeating periods employee is enrolled into, i.e., Accrual = 120 * 11/12 = 110
Unenrolment: If the enrolment end date is 18th October and enrolment start date is 1st April, then accrual is prorated based on the full repeating periods employee is enrolled into, i.e., Accrual = 120 * 7/12 = 70
5. No proration, full accrual is granted
This one will not prorate at all for any new hires or termination happening in between a plan term. In this case, full accrual will be provided.
6. No accrual is granted for partial period
This one would not give any accrual for the new hires joining mid-way through the plan term year. Similarly, anybody getting unenrolled will also not get any accrual using this option.
7. Formula
This one allows implementors to put any other custom logic using the Fast formula for pro-ration. It will keep the functionality the same as it was prior to 23B.
Scenario 2: Incremental Plan
Following are the options available when the accrual plan is incremental, each explained with examples:
- Based on Days spent in plan
For an incremental plan, it will pro-rate the accrual for the days spent in the repeating period divided by total number of days in the repeating period instead of the plan term.
Example: Annual Leave Plan is an Incremental type and plan term is calendar year with start date as 1/4/23
Enrolment: When Enrolment start date is 04/12/2023. Pro-rated Accrual = 19/30 * 10 = 6.33
Unenrolment: When Enrolment end date is 04/18/2023. Pro-rated Accrual = 10* 18/30 = 6
2. Full or No Accrual, depending on coverage
If the employee is enrolled mid of a repeating period, then if the coverage is more than half/less than half would determine whether to give full/no accrual for that repeating period respectively.
Example: Accrual Rate defined is 10, Plan term is calendar year with start date of 1/4/23.
Enrolment:
- When Enrolment start date is 12th April, full accrual is granted since the coverage is more than half in the month of April (current repeating period). Accrual = 10
- When Enrolment start date is 18th April, no accrual is granted since the coverage is less than half in the month of April (current repeating period). Accrual = 0
Unenrolment:
- When Enrolment end date is 10th May, no accrual is granted since the coverage is less than half in the month of May (current repeating period). Accrual remains 10 and nothing is accrued for the month of May as per the pro-ration rule selected.
When Enrolment end date is 18th May, full accrual is granted since the coverage is more than half in the month of May (current repeating period). Hence, accrual = 10 + 10 = 20
3. No Accrual is granted to partial period
This one is straightforward. It would not give any accrual if the employee is enrolled mid-way through the repeating/incremental period.
4. No proration, Full Accrual is granted
It would not pro-rate even if the employee is enrolled mid-way through the repeating/incremental period and will always give full accrual.
5. Formula
This one allows implementors to write your own custom Partial Period Formula providing the same functionality as prior to 23B release.
