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How To Setup Several Nonqualified Deferred Comp Elements For IRS Code 409A To Reduce Gross Before a 401K Deduction Is Processed (Doc ID 2029588.1)

Last updated on SEPTEMBER 18, 2019

Applies to:

Oracle HRMS (US) - Version 12.1.3 and later
Information in this document applies to any platform.


On : 12.1.3 version, Pension/PreTax Processing

When an employee has more than one 409A deduction, the 401K Eligible Comp balance is not being reduced by both of the 409A deductions, before doing the 401K deduction calculation

The employee's wages to be reduced by the 409A deductions and then have the 401K calculate on that reduced earnings

The issue can be reproduced at will with the following steps:
1. Create two new 409A deductions
2. Set the priority of the 409A deductions to deduct before 401K
3. Set the 409A deductions as Subtract from the 401K Eligible Comp Balance
4. See that if the employee only has one 409A deduction, the 401K deduction calculates against the correct balance gross - 409A
5. If the employee has two 409A deductions, then the 401K deduction in calculating using the gross - only one of the 409A deductions

The issue has the following business impact:
Due to this issue, users cannot use the system to calculate the correct 401K deduction. That would be Gross minus all 409A deductions


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