Created on: March 2, 2005 Last updated: April 15, SR81167 Requirements MRK GTN Conversion and NACHA Process Changes

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1 Created on: March 2, 2005 Last updated: April 15, 2005 Requirements MRK GTN Conversion and NACHA Process Changes Objective: Develop processes to: 1. convert existing fund-specific 403(b) and DCP after-tax GTNs to new general GTNs 2. modify the DCP Plan Code to be a Y/N indicator 3. send loan payment data to the Master Record Keeper via the NACHA process Project Type: This is a new PPS development. Requested by: HR&B Information Systems Support Analyst: Rowena Wong Carrie Gatlin Due Date(s): These changes are Date Mandated. It is requested that they be released to locations no later than May 20. Page 1 of 17

2 Background: Under the new "Master Record Keeper" arrangement with Fidelity Investments Tax-exempt Services Company (FITSCo), the Master Record Keeper will manage participant data, enrollment, and distributions for all of UC s defined contribution plans (DCP, 403(b), and 457(b)). Additional background information is included in SR 81156, "MRK Payroll Derivations and Loan Processing". Current Process: Currently, for participants in the 403(b) defined contribution and DCP after-tax plans, the employee record carries GTN numbers corresponding to the specific fund (in the case of 403(b), either a flat dollar or percentage deduction amount). For the DCP plan, the DCP Plan Code indicates the single fund option which the employee has selected. Valid values are: B E F G O S T - Bond Fund - Equity Fund - Fidelity Investments Fund - Insurance Company Contract Fund - Balanced Growth Fund (BGF) - Savings Fund - Treasury Inflation Protected Securities (TIPS) Fund Loan payments are currently not part of the NACHA process. Proposed Process: The one-time GTN conversion program will examine the employee record for current 403(b) GTNs with non-zero G balances and collapse them into single flat dollar or percentage-based GTNs. If an employee record contains both flat dollar and percentage deduction GTNs, the percentage deduction will be set to 0 and the flat dollar amount will be converted to the new GTN. For current after-tax DCP GTNs, the conversion program will collapse non-zero G balances into a single flat dollar deduction. The one-time program will also set the employee's DCP Plan Code to N if the current DCP Plan Code is blank. Otherwise it will be set to Y. For 403(b) loan payments, a new process will be established to send loan payment information to FITSCo via the NACHA file format. Page 2 of 17

3 1.0 Control Table Updates GTN Table CTT Data Elements Screen Modifications One-time Process...6 Tax Deferred 403(b) Flat Dollar Only:... 6 Tax Deferred 403(b) Percentage Only:... 7 Tax Deferred 403(b) Percentage and Flat Dollar:... 7 DCP Casual and Career:... 7 DC After-tax Deferred Only: EDB Maintenance Consistency Edits and Derivations Compute Process Changes Interface Files NACHA File... 9 NACHA Process for Loan... 9 NACHA Process 403(b), DCP After-tax and DCP UCRS File Other Processes Reporting and Notification IDOCs Attachment A...15 Attachment B: Record Layout for 7 Record in NACHA File...16 Attachment C: Record Layout Definition for 7 Record in NACHA File...17 Page 3 of 17

4 Requirements: 1.0 Control Table Updates 1.1 GTN Table New GTN numbers, listed below, were included in the first MRK-related Service Request (SR 81156). New GTNs should be printed on check stub. GTN Payroll GTN Liability Account Number Description 730 TD TD - % NTD DCP DCP CAS SS Deduction SS Prior GTNs for 403(b), DC After-tax, and DCP deductions should be made inactive as of the conversion. These GTNs are: Prior GTN Tax Deferred Saving 001 Tax Deferred Bond 002 Tax Deferred Equity 003 Tax Deferred ICC 292 Tax Deferred Money Market 293 Tax Deferred Calvert 294 Tax Deferred Multi Asset 228 Tax Deferred Fidelity 246 Tax Deferred Balance Growth 339 Tax Deferred Tips 356 Prior GTN Tax Deferred Saving % 232 Tax Deferred Bond % 233 Tax Deferred Equity % 234 Tax Deferred ICC % 235 Tax Deferred Multi Asset % 229 Tax Deferred Money Market % 236 Tax Deferred Fidelity % 247 Tax Deferred Calvert % 237 Tax Deferred Balance Growth % 357 Tax Deferred Tips % 342 Prior GTN Fidelity Non Tax Deferred 279 Insurance Company Contract Non Tax 202 Deferred Saving Non Tax Deferred 023 Page 4 of 17

5 Money Market Non Tax Deferred 203 Multi Asset Non Tax Deferred 252 Equity Non Tax Deferred 031 Bond Non Tax Deferred 030 Balanced Growth Non Tax Deferred 343 TIPS Non Tax Deferred 344 Prior GTN Bond Career 213 Bond Casual 038 Bond SSDCP Employee Deduction 390 Bond SSDCP Employer 383 Equity Career 212 Equity Casual 037 Equity Employee Deduction 389 Equity Employer 382 Fidelity Career 217 Fidelity Casual 278 Fidelity SSDCP Employee Deduction 387 Fidelity SSDCP Employer 380 Insurance Company Contract Career 214 Insurance Company Contract Casual 039 Insurance Company Contract SSDCP 391 Employee Deduction Insurance Company Contract Employer 384 Balanced Growth Career 345 Balanced Growth Casual 347 Balanced Growth SSDCP Employee 349 Deduction Balanced Growth SSDCP Employer 395 Saving Career 211 Saving Casual 036 Saving SSDCP Employee Deduction 388 Saving SSDCP Employer 381 TIPS Career 346 TIPS Casual 348 TIPS Employee Deduction 350 TIPS Employer 394 Multi-Asset Career 216 Multi-Asset Casual 156 Multi-Asset SSDCP Employee Deduction 393 Multi-Asset SSDCP Employer 386 Money Market Career 215 Money Market Casual 155 Money Market SSDCP Employee 392 Deduction Page 5 of 17

6 Money Market SSDCP Employer CTT The following CTT values must be established on the CTT table. Database Data Element Code Translation Code Translation Value Length EDB 0129 Y 34 DCP eligible EDB 0129 N 34 Not DCP eligible 2.0 Data Elements Two new codes are required to be added to the DCP Plan Code (EDB 0129). Y DCP eligible N Not DCP eligible. Previous values should be rendered obsolete, and the element should be made "illegal to update". A draft data dictionary page is included as Attachment A. 3.0 Screen Modifications Field level help associated with the DCP Plan Code (EDB 0129) on the ERET and IRET screens should be modified to reflect the new valid values for the data element. The DCP Plan Code element should no longer be editable on the ERET screen. 4.0 One-time Process Effective July 2005, for July earnings, 403(b) and DCP payroll deductions will be directed to new GTNs, and the old GTNs will be closed for future activity. This one-time program will update the EDB records of those employees currently participating in the 403b, DCP and After-tax program. Note: If an employee record contains both flat dollar and percentage deduction GTNs, the percentage deduction should be set to 0 and the flat dollar should be converted. One time Default Rules Tax Deferred 403(b) Flat Dollar Only: Convert existing 403(b) Flat Dollar GTNs to 730. If an employee record carries one or more current 403(b) flat dollar GTN, the dollar amounts in the G_Balance should be added together for the target GTN and the target GTN Effective Date (EDB7nnnE) should be set to the process date for the one-time program. For example, the employee has a current deduction of $10 in GTN 001 and $20 in GTN 002. The one time program should set GTN 001 and 002 to $0 and GTN 730 to $30. List of GTNs to be converted to New GTN 730: Current GTN Page 6 of 17

7 Tax Deferred Saving 001 Tax Deferred Bond 002 Tax Deferred Equity 003 Tax Deferred ICC 292 Tax Deferred Money Market 293 Tax Deferred Calvert 294 Tax Deferred Multi Asset 228 Tax Deferred Fidelity 246 Tax Deferred Balance Growth 339 Tax Deferred Tips 356 Tax Deferred 403(b) Percentage Only: Convert Existing 403(b) Percentage GTNs to 731.If an employee record carries one or more current 403(b) percentage GTN, the percentages in the G_Balance should be added together for the target GTN and the target GTN Effective Date (EDB7nnnE) should be set to process date for the one-time program. For example, the employee has a current deduction of 3% in GTN 232 and 4% in GTN 233. The one time program should set GTN 232 and 233 to 0% and GTN 731 to 7%. List of GTNs to be converted to New GTN 731: Current GTN Tax Deferred Saving % 232 Tax Deferred Bond % 233 Tax Deferred Equity % 234 Tax Deferred ICC % 235 Tax Deferred Multi Asset % 229 Tax Deferred Money Market % 236 Tax Deferred Fidelity % 247 Tax Deferred Calvert % 237 Tax Deferred Balance Growth % 357 Tax Deferred Tips % 342 Tax Deferred 403(b) Percentage and Flat Dollar: For employee with current deduction in more then one Current GTN and GTNs are in both the Percentage and Flat Dollar Group, the dollar amount in the G_Balance should be added together for the target GTN and the percentage should be set to 0%. The target GTN Effective Date (EDB7nnnE) should be set to process date for the one-time program. For example, the employee has a current deduction of 3% in GTN 232, 1% in GTN 233, $10 in GTN 001 and $20 in GTN 002. The one time program should set GTN 232, 233, 001 and 002 to 0 and GTN 730 to $30. DCP Casual and Career: For all employee records on the EDB, if the Retirement System Code is 'U', 'H', 'B', or '1', the DCP Plan Code should be set to 'Y'. Otherwise if the Retirement System Code is blank, 'N', 'P', 'F', 'S', or 'O', the DCP Plan Code should be set to 'N'. DC After-tax Deferred Only: Convert existing DC After-tax GTNs to 732. If an employee record carries one or more current non-tax deferred GTN, the dollar amounts in the G_Balance should be added together for the target GTN and the Page 7 of 17

8 target GTN Effective Date (EDB7nnnE) should be set to process date for the one-time program. For example, the employee has a current deduction of $10 in GTN 279 and $20 in GTN 202. The one time program should set GTN 279 and 202 to $0 and GTN 732 to $30. List of GTNs to be converted to New GTN 732: Current GTN Fidelity Non Tax Deferred 279 Insurance Company Contract Non Tax 202 Deferred Saving Non Tax Deferred 023 Money Market Non Tax Deferred 203 Multi Asset Non Tax Deferred 252 Equity Non Tax Deferred 031 Bond Non Tax Deferred 030 Balanced Growth Non Tax Deferred 343 TIPS Non Tax Deferred 344 The one time program should produce a change file for an audit report. 5.0 EDB Maintenance 5.1 Consistency Edits and Derivations Currently, a change to the DCP Plan Code or the Retirement System Code (EDB 0122) triggers several edits and derivations: If the Retirement System Code is set to 'U', 'H', 'B', or '1', and DCP Plan Code is blank, the DCP Plan Code is set to 'S' If the Retirement System Code changes from Safe Harbor to UCRP ('H' to 'U', '1', or 'B') or from UCRP to Safe Harbor ('U', '1', or 'B', to 'H') and the DCP Plan Code is blank, then the DCP Plan Code is set to 'S If the Retirement System Code is 'U', '1', 'B', or 'H', and the DCP Plan Code is deleted, the system resets the DCP Plan Code back to the previous value These edits and derivations should be replaced by a single derivation that is triggered whenever the Retirement Code is changed. If the Retirement System Code is set to 'U', 'H', 'B', or '1', the DCP Plan Code should be set to 'Y'. Otherwise if the Retirement System Code is set to blank, 'N', 'P', 'F', 'S', or 'O', the DCP Plan Code should be set to 'N'. 6.0 Compute Process Changes The New DCP Plan Code values map to the new GTN numbers as follows: DCP Plan New GTN Description Code (EDB0129) Y 733 DCP Career Y 734 DCP Casual Y 735 SSDCP Employee Deduction Y 736 SSDCP Employer Page 8 of 17

9 7.0 Interface Files 7.1 NACHA File NACHA Process for Loan A new process should be created for the 403(b) loan NACHA file format. The loan repayment information should be put into Fidelity s standard 80 byte record on the 7 record (positions 4-83). In the event that the loan repayment is negative due to an adjustment, the payment will appear as a positive amount in the 7 record but be associated with an ACH debit transaction on the 6 record instead of a credit transaction. The same transit number currently being used to send 403(b) and 457(b) transactions to Fidelity will be used for the loan payment batch. Below is the Value for each field (fill in spaces in fields that are not specified below): Field 1 = Field 2 = Location (0001, 0002, 0003 etc.) Field 4 = SSN ( ) Field 6 = Field 7 = 21 Field 9 = Loan ID (GTN U_Balance), General Purpose Loan ID or Primary Residence Loan ID Field 11 = 260 Field 12 = 14 Field 13 = 00 Field 15 = Load Payment Amount Field 17 = See attachments B and C for record layout. NACHA Process 403(b), DCP After-tax and DCP New GTNs and prior GTNs for 403(b), DCP After-tax, and DCP deductions should be added to the NACHA process as of the conversion. These GTNs are: GTN Description New GTN TD 730 TD - % 731 NTD 732 DCP 733 DCP CAS 734 SS Deduction 735 SS 736 Prior GTN Tax Deferred Saving 001 Tax Deferred Bond 002 Tax Deferred Equity 003 Tax Deferred ICC 292 Tax Deferred Money Market 293 Tax Deferred Calvert 294 Tax Deferred Multi Asset 228 Page 9 of 17

10 Tax Deferred Fidelity 246 Tax Deferred Balance Growth 339 Tax Deferred Tips 356 Prior GTN Tax Deferred Saving % 232 Tax Deferred Bond % 233 Tax Deferred Equity % 234 Tax Deferred ICC % 235 Tax Deferred Multi Asset % 229 Tax Deferred Money Market % 236 Tax Deferred Fidelity % 247 Tax Deferred Calvert % 237 Tax Deferred Balance Growth % 357 Tax Deferred Tips % 342 Prior GTN Fidelity Non Tax Deferred 279 Insurance Company Contract Non Tax 202 Deferred Saving Non Tax Deferred 023 Money Market Non Tax Deferred 203 Multi Asset Non Tax Deferred 252 Equity Non Tax Deferred 031 Bond Non Tax Deferred 030 Balanced Growth Non Tax Deferred 343 TIPS Non Tax Deferred 344 Prior GTN Bond Career 213 Bond Casual 038 Bond SSDCP Employee Deduction 390 Bond SSDCP Employer 383 Equity Career 212 Equity Casual 037 Equity Employee Deduction 389 Equity Employer 382 Fidelity Career 217 Fidelity Casual 278 Fidelity SSDCP Employee Deduction 387 Fidelity SSDCP Employer 380 Insurance Company Contract Career 214 Insurance Company Contract Casual 039 Insurance Company Contract SSDCP 391 Employee Deduction Insurance Company Contract Employer 384 Balanced Growth Career 345 Balanced Growth Casual 347 Page 10 of 17

11 Balanced Growth SSDCP Employee 349 Deduction Balanced Growth SSDCP Employer 395 Saving Career 211 Saving Casual 036 Saving SSDCP Employee Deduction 388 Saving SSDCP Employer 381 TIPS Career 346 TIPS Casual 348 TIPS Employee Deduction 350 TIPS Employer 394 Multi-Asset Career 216 Multi-Asset Casual 156 Multi-Asset SSDCP Employee Deduction 393 Multi-Asset SSDCP Employer 386 Money Market Career 215 Money Market Casual 155 Money Market SSDCP Employee 392 Deduction Money Market SSDCP Employer UCRS File The interface between EDB and UCRS must be modified to pass the new deductions to UCRS. The monthly and year-to-date deduction amounts should be passed on the contribution segment with the appropriate plan code. Each new GTN will be mapped to a plan code. The plan codes associated with each GTN are show in the table below. Tax Deferred 403(b) Flat Dollar: New GTN New Plan Code Tax Deferred Tax Deferred 403(b) Percentage: New GTN New Plan Code Tax Deferred % DCP New GTN New Plan Code DCP Career DCP Casual DCP SS Employee DCP SS Employer DC After-tax Deferred Page 11 of 17

12 New GTN New Plan Code Non Tax Deferred The format of the UCRS interface file does not need to change to accommodate the addition of these amounts as contribution segments. Prior GTNs for 403(b), DC After-tax, and DCP deductions should be mapped to the new plan code as of the conversion. These GTNs are: Tax Deferred 403(b) Flat Dollar: Old GTN New GTN New Plan Code Tax Deferred Saving Tax Deferred Bond Tax Deferred Equity Tax Deferred ICC Tax Deferred Money Market Tax Deferred Calvert Tax Deferred Multi Asset Tax Deferred Fidelity Tax Deferred Balance Growth Tax Deferred Tips Tax Deferred 403(b) Percentage: Old GTN New GTN New Plan Code Tax Deferred Saving % Tax Deferred Bond % Tax Deferred Equity % Tax Deferred ICC % Tax Deferred Multi Asset % Tax Deferred Money Market % Tax Deferred Fidelity % Tax Deferred Calvert % Tax Deferred Balance Growth % Tax Deferred Tips % DCP: Description Old GTN New GTN New Plan Code Bond Career Bond Casual Bond SSDCP Employee Deduction Bond SSDCP Employer Equity Career Equity Casual Page 12 of 17

13 Equity Employee Deduction Equity Employer Fidelity Career Fidelity Casual Fidelity SSDCP Employee Deduction Fidelity SSDCP Employer Insurance Company Contract Career Insurance Company Contract Casual Insurance Company Contract SSDCP Employee Deduction Insurance Company Contract Employer Balanced Growth Career Balanced Growth Casual Balanced Growth SSDCP Employee Deduction Balanced Growth SSDCP Employer Saving Career Saving Casual Saving SSDCP Employee Deduction Saving SSDCP Employer TIPS Career TIPS Casual TIPS Employee Deduction TIPS Employer Multi-Asset Career Multi-Asset Casual Multi-Asset SSDCP Employee Deduction Multi-Asset SSDCP Employer Money Market Career Money Market Casual Money Market SSDCP Employee Deduction Money Market SSDCP Employer Non-Tax Deferred: Old GTN New GTN New Plan Code Fidelity Non Tax Deferred Insurance Company Contract Non Tax Deferred Saving Non Tax Deferred Money Market Non Tax Deferred Multi Asset Non Tax Deferred Equity Non Tax Deferred Page 13 of 17

14 Bond Non Tax Deferred Balanced Growth Non Tax Deferred TIPS Non Tax Deferred Other Processes Necessary modifications to the W-2 form and corresponding tax process reporting will be included in Payroll Coordination's annual year-end W-2 SR. 9.0 Reporting and Notification 9.1 IDOCs The current year-to-date 403(b) total printed on the "Benefits Enrollment" and "Retirement and Savings" IDOCs should include balances from the newly established 403(b) and DCP deduction GTNs. Page 14 of 17

15 Attachment A System Number: EDB0129 User Access Name: Programming Name: DCP_PLAN_CODE IN PPPBEN Revision Date: 01/23/04 Comments Location(s): APS DCP Fund Selection Code CPS DCP Fund Selection Code IPS DCP Fund Selection Code OPP DCP Fund Selection Code Name: DCP PLAN CODE-EDB Type: ALPHANUMERIC Length: 1 Format N/A General Description Coding indicating Defined Plan eligibility. Code Interpretation Y N - DCP eligible - Not DCP eligible A B E F G M O S T EDB DCP PLAN CODE Previously Valid Codes - Multi-Asset Fund - Bond Fund - Equity Fund - Fidelity Investments Fund - Insurance Company Contract Fund - Money Market Fund - Balanced Growth Fund (BGF) - Savings Fund - Treasury Inflation Protected Securities (TIPS) Fund Page 15 of 17

16 Attachment B: Record Layout for 7 Record in NACHA File Fidelity Investments Share the Vision LOAN REPAYMENTS BY BATCH GROUP ALL ALPHA CHARACTERS MUST BE UPPER CASE NUMBER FIELD NO. OF POSITIONS VALUE FIELD NAME PICTURE BYTES FRO TO M ##### PLAN NUMBER 9(05) BATCH GROUP ID X(04) SPACES FILLER X(03) ###-##-#### SOCIAL SECURITY NUMBER X(11) SPACE FILLER X(01) ZEROS RESERVED 9(05) RECORD IDENTIFIER 9(02) SPACES FILLER X(04) New Data LOAN IDENTIFICATION X(12) Element SPACE FILLER X(01) TRANSACTION CODE 9(03) ITEM NUMBER 9(02) ZEROS RESERVED 9(02) SPACE FILLER X(01) LOAN PAYMENT AMOUNT S9(05)V SPACE FILLER X(01) ZEROS FILLER 9(07) SPACE FILLER X(09) Page 16 of 17

17 Attachment C: Record Layout Definition for 7 Record in NACHA File LOAN REPAYMENTS BY BATCH GROUP RECORD LAYOUT DEFINITION PURPOSE: NOTE: FIELD NUMBER To record the payment on a loan. Loan payment amount should be equal to regular payment amount. FIELD FIELD NAME DESCRIPTION 1 PLAN NUMBER The 5-digit number assigned by Fidelity UC 403(b) = UC DCP = UC 457(b) = BATCH GROUP ID A four character, alpha/numeric field defined by the user. This field is used to group transactions into separate batches for the same plan. This field must be left justified = UC Berkeley 0002 = UC San Francisco 0003 = UC Davis etc. 4 SOCIAL SECURITY NUMBER Each participant in the plan must have a unique Social Security Number. The 11-digit field requires that hyphens be included. 7 RECORD IDENTIFIER This field is equal to "21". 9 LOAN IDENTIFICATION A 12-character alpha/numeric field that identifies the loan. This field is user defined. [GTN U_Balance. The loan ID is three characters long left -justified with spaces in the remaining 9.] 11 TRANSACTION CODE This field is equal to "260" indicating a loan repayment. 12 ITEM NUMBER This field is equal to "14". 15 LOAN PAYMENT AMOUNT The total amount of principal and interest combined, when amortized by Fidelity. This field should be right justified with leading zeros and assumed or implied decimals. Amounts should be positive unless plan is set-up to receive negatives. Do not send zero dollar amounts. Page 17 of 17