Configure Deferred Compensation Plans for US Employees

Before You Begin: Make sure that you are familiar with the contents of the Deferred Compensation Plans tab in Payroll Setup > Deferred Compensation and Pension Plans. See The Deferred Compensation Plans Tab.

To configure a deferred compensation plan:

1. Go to Payroll Setup > Deferred Compensation and Pension Plans and click the Deferred Compensation Plans tab.
2. Enter a name and description of the plan.
3. In the Tax Method drop-down list, select the tax type for the plan.
4. (Optional) In the Reference Code field, enter a cross-reference (XREF) code.
5. In the Plan Limit section, make the required selections: 
   1. In the Limit Option drop-down list, select the limit option.
   2. In the Lookup Type drop-down list, select Deduction or Deduction Grouping.
   3. In the Deduction or Deduction Grouping drop-down list, select a deduction or deduction grouping.
6. In the Benefit Limit section, select the appropriate limit option type in the Limit Option drop-down list to enforce the compensation limit, and then select the earning or earning grouping that represents the wages that contribute to the threshold in the additional drop-down lists that are displayed. If you select anything other than Do Not Apply This Limit in this drop-down list:
   1. In the Lookup Type drop-down list, select Deduction or Deduction Grouping.
   2. In the Deduction or Deduction Grouping drop-down list, select the appropriate deduction or deduction grouping.
   3. In the Lookup Type drop-down list, select Earning or Earning Grouping.
   4. In the Earning or Earning Grouping drop-down list, select the appropriate earning or earning grouping.
7. In the Compensation Limit section, make the required selections: 
   1. In the Limit Option drop-down list, select the limit option.
   2. In the Lookup Type drop-down list, select Earning or Earning Grouping.
   3. In the Earning or Earning Grouping drop-down list, select the appropriate deduction or deduction grouping.
8. In the Limit Option drop-down list, select Do Not Apply This Limit (and proceed to the last step), or select  Apply Limit, and complete the following steps:
   1. In the Lookup Type drop-down list, select Earning or Earning Grouping.
   2. In the Earning or Earning Grouping drop-down list, select the appropriate earning or earning grouping.
9. Click Save.

Once you have finished configuring a deferred compensation plan, you need to configure which employees contribute to the plan through a payroll election. See Assign Deferred Compensation and Pension Plans to Employees.