Oracle Fusion Human Capital Management For RETIREES US Implementation and Use White Paper v1.9

Oracle Cloud Human Capital Management for
the US
Retiree Implementation and Use Guide (HR and Payroll)
Release 13
ORACLE WHITE PAPER | OCTOBER 2019
IMPLEMENTATION AND USE
Table of Contents
Table of Contents 0
Overview 1
Effective Dates 1
Calculation Cards 1
Organization Structures 1
Product Extension Parameter 2
Product Extension Offerings 2
Product Extension Management 3
Address Validation 3
Address Style Settings 4
Legal Entities 4
Legal Employers and Payroll Statutory Units 4
Legal Reporting Units and Tax Reporting Units 4
Organization Structure Models Supported by the US Localization 5
Creating Legal Entities 6
Identifying the LDG 6
Additional Information for Legal Employers and PSUs 6
Legal Entity Calculation Cards 7
Legal Reporting Units 7
Contact Details 7
Registrations 9
HCM Information 9

Reporting Establishments 11
Calculation Cards 11
Business Units 12
Workforce Structures 12
Managing Workforce Structures 13
Locations 13
Banking Setup 13
Configuring Person Definitions 13
Issuing Retiree Payments to Rollover Institutions 14
Payroll Configuration 14
Elements and Element Templates 14
Indirect Elements 16
Element Eligibility 16
Predefined Tax Elements 16
Secondary Element Classifications 17
Salary Basis 17
Wage Basis Rules 17
Process Configuration Group 18
Retiree Record Management 18
Adding a Retiree 18
On-Boarding a Retiree 18
Transitioning an Employee to a Retiree 20
Issuing Pension Funds to Other Payees 21

When the Person is an Employee and Retiree at the Same Time 23
Maintaining Retiree Person Information 23
Maintaining Person Information 23
Maintaining Employment Information 23
Adding a Second Assignment 23
Managing Retirees Living Abroad 24
Managing Retirees Living in States that Do Not Tax Pension Payments 24
Payroll Processing 24
Taxation Within Oracle Fusion HCM 24
Retiree Tax Withholding for Pension and Annuity Payments Card 24
Setting Up Automatic Card Creation 25
Creating the Card Manually 25
Creating the Card Through the HCM Spreadsheet Data Loader 25
Creating Tax Card Associations Through the HCM Spreadsheet Data Loader 26
Adding a Second TRU Association for a Second Assignment 27
Exempting Retirees from Taxes and Wage Accumulation 28
Tax Calculation 28
Payroll Processing 28
Other Considerations 28
Flat Rate Withholding for Earnings: How the Rates Are Determined 29
Calculation Cards for Retirees 30
Reporting Information Card 30
How Retiree Calculation Cards Work Together 31

Terminating a Retiree 31
Assigning Salary Information to a Retiree for Periodic Pension Payments 31
Assigning a Payroll to a Retiree 31
Assigning a Payroll to the Retiree 31
Transferring a Retiree to a New Payroll 32
Assigning Payment Methods to the Retiree 32
Processing International ACH Transfers 32
Payroll Processes 33
Tax Troubleshooting 33
Additional Set Up Reference Material 33
Vertex Installation 33
User Interface Configuration 33
Predefined Payslip Template Configuration 33
Check Template Configuration for the MICR Codes 34
Appendix A: Worked Examples 34
On-Boarding a Retiree Eligible for Multiple Distribution Types 34
TRU Configuration 34
Elements and Salary Basis Configuration 35
On-Boarding the Retiree 38
Setting Up an Estate for a Deceased Retiree 41
Additional Reference Documentation 43
United States 43
Global Human Resources 43

Global Payroll Interface 43
Global Payroll 43
General 43

Overview
This document is intended to document how to:
» Define the organizational structures required for HR and Payroll processing of US retirees
» Define the data required for paying a US non-worker retiree
» Define the data required for adding and maintaining a US non-worker retiree
» Define the data required for HR and Payroll reporting for US retirees
Effective Dates
Effective Dating in HCM Cloud is crucial. For further information, see the Oracle Cloud Human Capital Management
for United States: Implementation and Use white paper (1676530.1) on My Oracle Support.
Calculation Cards
In Oracle Fusion HCM, there are many types of calculation cards. A calculation card is a type of record that is
maintained either on a payroll statutory unit (PSU)/tax reporting unit (TRU) or retiree level, that allows you to
configure your records as needed. Types of cards include:
Card Level Description
PSU/TRU Level These cards allow you to update information as referenced in the “Legal Entity Calculation
Cards” section of this document. Also refer to the “Configuring Organization Calculation Cards
for the US: Explained” topic on the Help Portal.
» Manage Legal Entity Calculation Cards > Calculation Rules for Tax Reporting and Payroll
Statutory Unit – The information here is on the Payroll Statutory Unit level.
» Manage Legal Reporting Unit Calculation Cards > Calculation Rules for Tax Reporting and
Payroll Statutory Unit – The information here is on the Tax Reporting Unit level.
Retiree Level These cards allow you to update information as referenced throughout this document on a
retiree’s record. Also refer to the “Calculation Cards for the US: How They Work Together”
topic on the Help Portal.
» Reporting Information card > Retiree Reporting Information Calculation Component – uses
referenced in this guide the special reporting section
Available values on the Enterable Calculation Values on Calculation Card tab:
» Taxable Amount Not Determined
» Total Distribution
» Traditional, SEP or Simple IRA
» Annuity Percentage
» Total Distribution Percentage
» First Year of Designated Roth Contribution
» FATCA Filing Requirement
» Account Number
» Tax Withholding for Pensions and Annuities – uses referenced in:
This guide in the Managing the Retiree Withholding Certificate section
Organization Structures
Before an employer can add a US non-worker retiree, or run any country-specific processes, the Implementation
Team must set up the organization structures required for the management of HR processes. You can perform all
setup tasks using the Functional Setup Manager (FSM). For further information, see the Oracle Cloud Human
Capital Management for United States: Implementation and Use white paper (1676530.1) on My Oracle Support.
1 | IMPLEMENTATION AND USE

Information regarding organization structures can be found in the document referenced above specifically for:
» Enterprises
» Implementation Projects
» Geographies
» Load Payroll Tax Information
» Enterprise Structures
» Legal Addresses
» Legislative Data Groups
» Jurisdictions
The following information for organization structures is unique to retirees, and should be reviewed carefully in this
guide.
» Product Extension Parameters
» Legal Entities
» Legal Entity Calculation Cards
» Legal Reporting Units
» Business Units
Product Extension Parameter

Use the Manage Features by Country or Territory task to select the correct product for each of your legislations and
ensure that the appropriate features work correctly in your implementation. For further information, see the
Selecting Country Extensions for the US: Critical Choices topic in the Help Portal.
Valid values for the selected extension parameter for retiree processing are:
» Human Resources or None (this is the default)

» Payroll
Product Extension Offerings

The following tables illustrate the offerings for each product extension, depending upon user selections:
SAAS FEATURE SUPPORT BY PRODUCT EXTENSION
Feature HR or None Payroll
Vertex License Included Included
Address Validation Included but not enabled Included and enabled

NOTE: Oracle strongly
recommends you enable
address validation for the HR
product extension. Doing so
makes it much easier to
transition to the Payroll or
Payroll Interface products.
ON-PREMISE AND ON-DEMAND FEATURE SUPPORT BY PRODUCT EXTENSION
Feature HR or None Payroll
Vertex License Not included but optional Not included but required

Requires separate purchase of a Requires separate purchase of a
Vertex geography data license. Vertex payroll calculation license.
Address Validation Not included but optional Included and enabled with purchase
Requires separate purchase of a of Vertex payroll calculation license
Vertex geography data license.
NOTE: Oracle strongly
recommends you enable
address validation for the HR
product extension. Doing so
makes it much easier to
transition to the Payroll or
Payroll Interface products.
Product Extension Management

To view and set the product extension:
1. Search for and start the Manage Features by Country or Territory task.
2. Ensure the Selected Extension value is correct for the United States legislation.
3. Make any necessary changes, and click Save.
4. Click Done.
Address Validation
Address validation is the validation of county, city, state, and ZIP Code combinations.
Address validation is automatically enabled for some license and product extension combinations. For others, you
must enable it manually, or it is not available at all.
If you are an On-Premise or On-Demand customer with an HR-only product extension, and you want the same
address restrictions as provided by the Payroll product (one home address per retiree), you can:
1. Purchase a Vertex license.
2. Switch the product extension to Payroll Interface.
3. Install the Vertex files.
NOTE: Although you are switching to the Payroll Interface, this is only for purposes of address restrictions.
The Payroll Interface product extension is not supported for retirees for purposes of passing retiree data to a
third party for processing retiree payrolls.
Enabling Address Validation
To manually enable or disable address validation:
1. Search for and start the Manage Features by Country or Territory task.
2. Select the Address Validation box.
3. Click Save and then Done.
NOTE: If you have not enabled address validation, then you must take care when switching product
extensions, as any address you previously defined may be missing required values, such as county and tax
district. There is also the possibility of invalid address combinations, such as mismatched city and ZIP Code
combinations.
Maintaining Geographies with Address Validation
You must run the Load Geographies process for all product extensions using address validation. Run this process
frequently, as geographies can be added at any time. For further information, see the Geographies section below.

Validating Address Changes
A retiree must have a valid address in order for them to receive their tax card and to ensure the accuracy of their tax
calculations. You must revalidate the address data prior to using any payroll features if you have:
» Switched the product setting from “Human Resources or None” to “Payroll”

» Made changes to addresses while address validation was not turned on
» Never activated address validation
For further information, see Fusion Payroll: Types of License In Fusion Payroll (1611941.1) on My Oracle Support.
Address Style Settings

Refer to the “Changing Address Style and Address Validation Settings: Critical Choices” online help topic in the Help
Portal.
Legal Entities
A legal entity is an entity unequivocally identified and given rights and responsibilities under commercial law, through
registration with the territory’s appropriate authority. Legal entities have the responsibility to account for themselves
(through balance sheets, income statements, specified reports, and so on) to company regulators, taxation
authorities, and owners according to rules specified in the relevant legislation.
Legal Employers and Payroll Statutory Units

Oracle Fusion HCM recognizes different types of legal entities:
» A legal employer is a legal entity that employs workers.

» A PSU is a legal entity responsible for paying workers, including the payment of payroll taxes. A PSU can pay
and report on payroll tax on behalf of one or many legal entities, depending on the structure of your enterprise.
PSUs provide a way to group legal employers so that certain statutory calculations, such as court orders and some
taxes, can be performed at a higher level. A legal employer can belong to only one PSU, and the PSU represents
the highest level of aggregation for a person. No balances are aggregated across PSUs.
When defining a legal entity, you must consider the context in which it is to be used:
» If it is to be used in an HCM context, designate it as a legal employer. In an HCM implementation, it is

mandatory to define legal employers.
» If it is to be used in a payroll context, designate it as a PSU.
» You can define a legal entity that is both a legal employer and a PSU.
» If multiple legal employers need to be grouped together for tax reporting purposes, you can associate them all
with a single PSU. If legal employers do not report together, they must be segregated by PSU.
» You must define PSUs for retirees separately from those for employees.
» You must designate these PSUs with the 2 Tier – Multiple Assignment employment model.
No legal entities are predefined for the US. You must create all legal entities that apply to the enterprise you are
setting up.
Legal Reporting Units and Tax Reporting Units

An LRU is the lowest level component of a legal structure that requires registrations. It is used to group retirees for
the purpose of tax reporting for each 1099-R distribution code. Each TRU represents a specific statutory or tax
reporting obligation.

If an LRU is to be used for tax reporting purposes, then it must be configured as a TRU. When you create an LRU
that belongs to a legal employer (that is not also a PSU), you must select a parent PSU. In this way, TRUs are
indirectly associated with a legal employer by association with a PSU.
TRUs for retirees are especially relevant for the US because the TRU captures the employer’s:
» US federal employer identification number (FEIN)

» State employer identification number (EIN)
» Registration details
This captures the FEIN, not the TRU itself.
» Statutory registered name

» Form 1099-R Distribution Code
Note: The payroll process does not use these codes to determine tax withholding. Instead, it uses the
following hierarchy:
1. Overrides set on the Retiree Tax Withholding for Pension and Annuity Payment card
2. Overrides set on the organization calculation card at the TRU level
3. Default settings as defined by Vertex
Organization Structure Models Supported by the US Localization

The sections that follow describe how to define a set of organizational units that comprise the organization structure
required to manage HR processes for the US. Each enterprise can combine these organizational units in a different
way in order to set up the organizational model that best fits their business needs. Before you begin creating
organizational units, it is helpful to understand the organization structure models supported by the US localization.
The figure below illustrates the configuration supported by Oracle Fusion HCM for the US for Retirees:
LDG Corporation M
Corp M Corp M
PSU / Legal Employer Employee PSU Retiree PSU
Corp M Retiree Corp M Retiree Corp M Retiree

TRU Corp M
Employee TRU 1
Corp M
Employee TRU 2
Corp M
Employee TRU 3
TRU 1
(Distribution 1)
TRU 2
(Distribution 2)
TRU 4G
(Distribution 4G)
An enterprise can have multiple PSUs belonging to the same or different LDGs. It is possible for a legal entity to be
both a PSU and a legal employer. If a PSU is paying multiple distribution code types, you must define separate
TRUs for each distribution code.
A payroll relationship is the association between a person and a PSU. It represents the highest level of balance
aggregation. Retirees that are set up in multiple TRUs under the same PSU would have one payroll relationship.
Person-level balances that span multiple TRUs can be accessed by the payroll processes.

Creating Legal Entities
Before you define any legal entities, you must have already defined any associated legal addresses through the
Manage Legal Addresses task.
To define legal entities:

1. Select Manage Legal Entities in the implementation project task list.
2. Click Create to display the Create Legal Entity page.
3. If you are identifying this legal entity as a PSU:
» If you have not yet defined your US LDG, the application automatically creates the LDG for you and
associates it with the PSU.
» If you have already defined a US LDG, you must manually associate it with the PSU. Refer to identifying
the LDG below for instructions.
4. If you do not designate this legal entity as a PSU, you can assign an existing PSU to it by selecting one from
the Payroll Statutory Unit field.
5. Provide any other required information.
6. Click Save and Close.
Identifying the LDG

To view the LDG associated with a PSU:
1. Select the implementation project.

2. Select Manage Legal Entity HCM Information.
3. Search for the PSU or legal entity.
4. Select the PSU tab. By default, general information for the PSU is displayed, including the LDG. If it has not
automatically been associated, you can click on the drop-down to find the appropriate LDG to associate.
Additional Information for Legal Employers and PSUs

Additional information about legal employers and PSUs are required for:
» Payroll processing
» Third-Party Tax Filing
NOTE: In-house electronic year-end and quarterly filings processes are not yet available in Oracle Fusion
HCM for retirees. You must perform these filings through the US Third-Party Tax Filing interfaces. See
Oracle Fusion HRMS (US): Payroll Third-Party Tax Filing Interface white paper on MOS for necessary setups
for the Tax Filing Interface.
To enter the additional HCM information:

1. Select Manage Legal Entity HCM Information in the implementation project task list.
2. In the Select Scope window, choose Select and Add in the Legal Entity LOV.
3. Click Apply and Go to Task.
4. Search for and select the legal entity you just created, and then click Save and Close.
5. If the entity is a legal employer, complete the fields on the Legal Employer tab.
Click Edit to correct or update the details.
6. Select the 2 Tier - Multiple Assignment employment model.

7. If the legal entity is also a PSU, select the Payroll Statutory Unit tab.
8. Enter the Fiscal Year Start.
9. Click the Federal link, and enter any additional information to support electronic year-end filings for the US.

Data entered here applies to all LRUs attached to the PSU.
10. Click the appropriate link to enter additional information to support electronic year-end and quarterly filings for
those regions.
Data entered here applies to all LRUs attached to the PSU.
Legal Entity Calculation Cards

Additional information about federal and regional tax rules may be required for Oracle HCM processes. Due to the
complexity of taxation rules for the various retirement distributions, you must configure your specific rules at the TRU
level. See the Legal Reporting Units section below for details.
Legal Reporting Units

You must designate all LRUs as TRUs. You define TRUs for retirees separately from those for employees, based
on the 1099-R distribution code or combination of codes your organization uses. You must associate these TRUs
with PSUs reserved for retirees only.
From the Manage Legal Reporting Units Calculation Cards task, you can designate flat tax rate overrides. The flat
tax rate overrides you set on each TRU apply to all payments and all payroll run types for that TRU.
Set the following at the LRU level:
» Federal Flat Rate tax rules

» Regional Flat Rate tax rules
The first time you create a legal entity as a PSU, the application automatically creates an associated LRU, which
you must then identify as a TRU. When you assign an existing PSU to a legal employer, the default LRU inherits
the legal entity’s name.
To create an LRU:
1. Select Define Legal Reporting Units for Human Capital Management in the task list.
2. Select Manage Legal Reporting Unit in the implementation project task list.
3. On the Scope Selection window, select Create New and click Apply and Go to Task.
NOTE: An LRU with the same name as the previously created legal entity is created by default.
Your LRU is automatically designated as the main LRU for the legal entity.
4. To create a second LRU for this legal entity, enter the required information on the Create Legal Reporting Unit
page.
Contact Details
HCM employer contact details are captured at the LRU level. They are not required for retiree reporting, and are for
informational purposes only.
To capture LRU contact details:

1. From the implementation project, expand Workforce Deployment > Define Common Applications Configuration
for Human Capital Management > Define Enterprise Structures for Human Capital Management > Define Legal
Entities for Human Capital Management > Define Legal Reporting Units for Human Capital Management >
Manage Legal Reporting Unit.
2. Select the legal entity name under Selected Scope.
3. On the Select Scope page, select the Search Legal Reporting Units option and click Apply and Go to Task.

4. Highlight the LRU from the list, and click Contact.
5. On the Manage Contacts page, click Create Contact.
6. Enter the following information:
Field Name Description
Role Select the role of the person designated as the contact.
First Name First name of the designated contact.
Last Name Last name of the designated contact.
Job Title Code Job title code of the designated contact.
From Date Date the person became the designated contact.
7. Click OK.
8. Define the contact points:
a. In the Contact Information region, select the Contact Points tab.
b. Click Create.
c. Specify the following fields:
Contact Point Type Select Phone.
Area Code Specify the contact person’s area code.
Phone Specify the contact person’s phone number.
Extension Specify the contact person’s phone extension.
From Date Specify the date from which this phone number is valid.
d. Click OK.
e. Click Create.
f. Specify the following fields:
Contact Point Type Select E-mail.
Purpose Select Work.
E-Mail Format Select the contact person’s email format.
E-Mail Specify the contact person’s email address.
From Date Specify the date from which this email address is valid.
g. Click OK.
9. Define the contact roles:
a. Select the Contact Roles tab.
b. Click Add Row.
c. Click the Legal Role column and select a role.

Registrations
LRUs are connected to legal authorities through LRU registrations. When you create a legal entity, an LRU
registration is automatically created for the selected identifying jurisdiction. You must create a registration for the
United States Federal Tax jurisdiction to enter the Employer FEIN. If the LRU interacts with other legal authorities,
you must create additional registrations as appropriate.
NOTE: Employer FEIN, registered name, and state EIN details are captured using the Manage Legal
Reporting Unit Registrations task.
If the United States Federal Tax registration is not present at the legal reporting unit level, some payroll processes
will not function properly (such as Archive Periodic Payroll Results).
To define a legal reporting unit registration:
1. Select the parent legal entity and then the LRU, as described in previous tasks.
2. Select Manage Legal Reporting Unit Registrations in the task list.
The Manage Legal Reporting Unit Registrations page displays a list of registrations for this legal reporting unit.
3. Verify there is a record for United States Federal Tax.

4. If no United States Federal Tax record exists, click Create to add a registration.
5. Enter the required information.
When you select a jurisdiction, the Territory field is populated automatically.
The Issuing Legal Authority field displays a list of all legal authorities associated with the selected jurisdiction.
See previous section on Jurisdictions for further information. The Registered Address field displays a list of all
predefined legal addresses.

You must perform configuration actions for your federal and state registrations at the LRU level. Ensure the
following fields are populated for each TRU:
Jurisdiction Field Name Description
United States Federal Tax EIN or TIN Employer’s federal EIN.
<State> Income Tax Legal Reporting Unit Registration Number Employer’s state EIN.
NOTE: Retiree processing is not supported for Guam, Puerto Rico, or Virgin Islands.
HCM Information
Additional information about LRUs is required for Oracle Fusion HCM processes. Fields are available to support
electronic year-end and quarterly filings. Entry in these fields for the LRU overrides any values you may have
entered for the PSU.
NOTE: In-house electronic year-end and quarterly filings are not currently supported in Oracle Fusion HCM.
These filings must be performed through the US Third-Party Tax Filing interfaces. For further information, see
the Oracle Fusion Human Capital Management for United States: Third-Party Tax Filing Interface white paper
(1594079.1) on My Oracle Support.
This content is used for payroll processing and the Third-Party Tax Filing Interface.
To specify the required HCM information for TRUs:
1. Select the parent legal entity and then the LRU, as described in previous tasks.

2. Start the Manage Legal Reporting Unit HCM Information task from the implementation project task list.
3. On the Manage Legal Reporting Unit HCM Information page, select Tax Reporting Unit and Reporting
Establishment based on the following.
Selected Extension Tax Reporting Unit Reporting Establishment
Payroll Required Optional
Nonpayroll Required If you have multiple LRUs, selection is required for each.
You must identify the LRU as a TRU in order to pay your retirees.
Identify the LRU as a TRU and reporting establishment for non-payroll customers in order for reporting
functionality. Currently there is no required reporting for retirees (such as EEO and VETS), but as a best
practice, mark each TRU as a reporting establishment.
4. Click Next.
5. Select Tax Reporting Unit.
Do not enter any data in the Tax Reporting Unit Type or Associated Legal Employer areas.
6. Click Federal.
Use this page to specify information required for year-end and quarterly filings, as well as various reports and
processes for the US.
Entry in these fields overrides any values entered for the PSU.
NOTE: The list of states appears on left the side. If there are no data capture fields needed for that state at the
PSU or TRU level, the state does not appear in the list. The majority of fields are captured at the TRU level. If
there are fields at TRU level and NOT at the PSU level, you will still see the state in the list for the PSU.
7. Enter the following values:
Section Field Name Notes
Federal Year-End Person Type for Payroll Process Select Retiree.

Reporting Rules
Third-Party Interfaces Form 1099-R Client Identifier Used by the Third-Party Tax Filing Interface.
For further information, see the Oracle Fusion HRMS (US): Third-
Party Tax Filing Interface white paper (1594079.1) on My Oracle
Support.
NOTE: The Combined Federal or State Filing Program is not
supported.
Form 1099-R Distribution Form 1099-R Distribution Code Select the appropriate distribution code for this TRU. All people
Code assigned to this TRU are assigned this code. This field identifies
the code appearing on the retiree’s Form 1099-R.
NOTE: Never change the Distribution Code for your TRU. If
you need a different distribution code setting, you must use a
new TRU.
Form 1099-R Distribution Total Distribution Select Yes if all payments made from this TRU are total
Code distributions.
To identify specific payments as total distributions, use the Total
Distribution field on the TRU’s Retiree Reporting Information
calculation component of the retiree’s Reporting Information Card.

Reporting Establishments
A reporting establishment is an organization used for HR statutory reporting. While there is currently no HR
statutory reporting required for retirees, it is recommended that you mark each TRU as a reporting establishment.
For non-payroll implementations, if you have multiple LRUs, each must be a reporting establishment. If you have a
single LRU, selection is optional, but you must associate the TRU to a legal employer at the legal entity level.
For payroll implementations, selection is optional.
You can identify a TRU as a reporting establishment during LRU definition, as described in the previous section.
To identify an existing TRU as a reporting establishment:
1. Sign in to the Oracle Fusion HCM application using an Application Implementation Consultant role that has
privileges to create and modify all organizational structures.
2. Select Setup and Maintenance from the Navigator.
3. Select Manage Reporting Establishments in the implementation project task list.
4. Click Create.
5. On the Create Reporting Establishment page, indicate if you want to select an existing TRU to define as a
reporting establishment or create a new one.
6. In the Reporting Establishment Description section, provide the required information.
7. Click Next to provide additional details, and then review and submit it.
Calculation Cards
To properly calculate tax withholding, the Oracle Fusion HCM payroll process may require additional information
about federal and regional tax rules, such as:
» Federal flat percentage withholding tax calculations

» State flat percentage withholding tax calculations
The flat rate overrides you set on the Organization Card apply to all payments and payroll run types.
Creating the Calculation Card
To create the TRU calculation card:

1. Start the Manage Legal Reporting Unit Calculation Cards task.
2. On the Tax Reporting Unit page, click Create.
3. On the Create Calculation Card page, provide the effective date.
4. Select Calculation Rules for Tax Reporting and Payroll Statutory Unit.
5. Click Continue.
Creating Federal Tax Rules
Federal tax calculations for retirees use the same Vertex taxation rules as for employees. Vertex provides all
statutory compliance for the payroll process. Overrides for flat rates are available at the Organization Card level for
retiree taxation. Overrides of flat rates are not required.
To enter flat percentage federal income tax calculation rules for 1099-R recipients at the TRU level:
1. Click Create in the Calculation Components section.
2. In the Calculation Component field, select Federal Income Tax for 1099-R.
3. Click OK.

4. In the Enterable Calculation Values on Calculation Cards tab, click Create.
5. In the Name field, select Retiree Federal Tax Rate.
6. In the Value field, enter the tax rate for payments from this TRU.
For example, to tax all payments generated out of this TRU at a flat rate of 10 percent, enter 0.10.
7. Click OK.
For further information, see the Configuring Organization Calculation Cards for the US: Explained topic in the Help
Portal.
Creating Regional Tax Rules
State tax calculation for retirees use the same Vertex taxation rules as for employees. Vertex provides all statutory
compliance for the payroll process. Overrides for flat rates are available at the Organization Card level for retiree
taxation. Overrides of flat rates are not required.
To enter flat percentage regional income tax calculation rules for 1099-R recipients at the TRU level:
1. When creating or editing the card, click the Regional link in the Calculation Card Overview section.
2. Under the Actions menu, select Create.
3. Select the appropriate state, and click OK.
4. In the Calculation Components section, click Create.
5. In the Calculation Component field, select State Income Tax for 1099-R.
Confirm it doesn’t already exist before you attempt adding it.
6. Click OK.
7. In the Enterable Calculation Values on Calculation Cards tab, click Create.
8. In the Name field, select Retiree State Tax Rate.
9. In the Value field, enter the tax rate for all payments from this TRU.
For example, to tax all payments generated out of this TRU as a flat rate of 10 percent, enter 0.10.
10. Click OK.

Business Units
Oracle Fusion HCM for the US uses the business unit classification to group sets of data. When you associate a
business unit with a default set, the default set is inherited by every entity connected to the business unit.
No US-specific data is required or captured at this level. However, a retiree must be assigned a business unit when
adding the retiree to the system, so you must create business units for the enterprise.
Workforce Structures
Workforce structure setup should be performed once you have completed organization structure setup. Workforce
structures are used to:
» Define additional partitioning of the retirees within the organization, including divisions, departments, locations
and reporting establishments
» Set up actions and reasons that apply to the work relationship cycle of retirees

No workforce structures are predefined for the US. The Implementation Team is responsible for defining all the
workforce structures that apply to the enterprise for which the setup is being done. Some workforce structures may
not apply to every enterprise.
Managing Workforce Structures

Maintenance of workforce structures can be performed through FSM.
Use this work area to manage your work locations. Despite not being active workers, you must assign retirees a
work location to identify the location from which they retired. If you don’t track this information, you can simply setup
a generic work location for all retirees. All retirees automatically are on-boarded with a work from home flag as Yes.
Locations
Locations identify:
» Where business is conducted, including the physical location of a workforce structure

» Workers’ physical work locations
» Last work location of a retiree
» Other areas of interest to the business
While retirees are automatically assigned Work-at-Home status, you must still assign them a work location on their
employment record.
To create or manage locations:
1. Select Manage Locations in the implementation project task list.

2. Click Create, or search for and select an existing location.
When editing the location record, use the Correct option to make the changes effective to the start of the
existing record. Otherwise use the Update option.
3. Under Basic Details, define the effective start date.

4. Define the other required fields in the Basic Details and Location Information sections.
5. Define the required fields in the Main Address section.
Banking Setup
An HR-only customer may want to add payee banking information even if payroll is not being processed by Oracle
Fusion HCM Global Payroll. For example, banking setup may be required for reporting purposes or because the
data may be passed to other products, such as an expenses module. For further information, see the Oracle Cloud
Human Capital Management for United States: Implementation and Use white paper (1676530.1) on My Oracle
Support. Review the Banking Set Up section for complete set up details.
Configuring Person Definitions

Before you can enter bank details for retirees, perform the following:
» When on-boarding a retiree, run the Maintain Party and Location Current Record process from the Scheduled
Processes section of the Navigator.
This process updates the current profile record for people, organizations, and locations based on the current
date. This allows you to enter payment method information. If you do not run this process, you cannot set up
payment method information for your retiree.

For information on on-boarding retirees, see the Retiree Record Management section below.
NOTE: You do not need to run this process for employees transitioning into retiree status.
» When finished running the Maintain Party and Location Current Record process, use the Manage Personal
Payment Methods task to add payment details to your retiree’s record.
For existing employees transitioning into retirement, if they used the direct deposit payment method, that
information remains available for you to select for their retiree payments, without having to run the “Maintain
Party and Location Current Record” process.
Issuing Retiree Payments to Rollover Institutions

A retiree can designate all or a portion of their payments to a rollover institution. To configure these payments:
1. Define a Voluntary Deductions element for the person.

2. Submit a check request through your Accounts Payable department with the appropriate payment details.
For example, your retiree receives a monthly pension payment of 1000 USD, so you define a Voluntary Deduction
for it. After payroll processing, a General Ledger account holds this money, while your Payroll Department issues a
check request to Accounts Payable. This check would be payable to the rollover institution.
Payroll Configuration
Consolidation groups and payroll definitions are normally concepts related to payroll, but if an HR-only customer
needs to assign banking details for their retirees, then these objects must be set up. For further information, see the
Oracle Cloud Human Capital Management for United States: Implementation and Use white paper (1676530.1) on
My Oracle Support.
Elements and Element Templates

You create elements through predefined element templates, which provide you with an intuitive user interface and
help you manage the creation of different types of elements and their associated objects. The element definition
process gets a set of rules from the template and processes the predefined template structure to create appropriate
data.
A set of element templates is predefined for the US. Access these templates through the Manage Elements task.
To create a regular earnings element for pension income:
1. Select Manage Elements in the Setup and Maintenance or Payroll Calculations work area.
2. On the Manage Elements page, click Create.
3. On the Create Element window, select an LDG.
4. Select a primary element classification of Standard Earnings.
5. Select a secondary element classification of Regular Not Worked. The secondary classification is used when
updating or creating wage basis rules or wage attachment rules.
6. Select a Category of Standard.
7. Click Continue.
NOTE: Primary classifications have a priority range. When you define an element, you can override the
default processing priority with another number from the range. This is useful if you need to establish the
order in which the element processes with respect to other elements in the primary classification range.
8. Complete the fields on the Basic Information page.

The questions and default answers are based on settings for the predefined classifications for the US. Your
answers drive the definition of the element you are creating.
The following table describes the default behaviors for federal taxation using default settings, assuming no flat
overrides were entered at the Organization Card level:
Earnings Payment Types Regular Payroll Run Taxation Supplemental Payroll Run Taxation
Standard Annualized N/A
Supplemental: Process and pay with other earnings Annualized / Aggregation Tiered Flat Rate
Supplemental: Process separately but pay with other Tiered Flat Rate Tiered Flat Rate
earnings
Supplemental: Process separately and pay separately Tiered Flat Rate Tiered Flat Rate
Standard and Supplemental: Process and pay with Annualized / Aggregation Tiered Flat Rate
other earnings (n/a for Standard Earnings)
Standard and Supplemental: Process separately but Annualized (Standard Earnings) + Tiered Flat Rate
pay with other earnings Tiered Flat Rate (Supplemental (n/a for Standard Earnings)
Earnings) Combined
Standard and Supplemental: Process separately and Annualized (Standard Earnings) + Tiered Flat Rate
pay separately Tiered Flat Rate (Supplemental (n/a for Standard Earnings)
Earnings) for two separate pays
The state taxation varies by state. In cases where the regular payroll run processes a Supplemental earnings,
the process:
a. Attempts to use the aggregation calculation method.
b. If aggregation is not one of the acceptable calculation methods for the state:
» If the state is Georgia, it uses the tiered flat rate tax method.
» If the state is Ohio, it uses the aggregation tax method.
» For all other states, it uses the Vertex default method.
For additional information, see the Vertex Calculation Guide.
9. Click Next.
10. For Periodicity Conversion Rule, use the following chart:
Rate Conversion Rule Description Example
Standard Rate Annualized Calculates the annual rate using the input To convert a weekly amount to a semimonthly
periodicity, and converts the amount to an output periodicity, the formula:
periodicity and rate. 1. Multiplies the weekly amount by 52.
Uses default values to calculate the annual rate, 2. Divides the result by 24.
such as 2080 hours or 260 working days.
Standard Rate Daily Calculates the daily rate using the input To convert an annual amount to daily periodicity,
periodicity, and converts the amount to an output the formula:
periodicity and rate. 1. Divides the annual amount by 365.
Uses a default value to calculate the daily rate, 2. Multiplies the result by the number of days
such as 260 working days a year. in the payroll period.
Standard Working Hours Uses standard working hours to convert the N/A
Rate Annualized monetary value and their working hours to an
annual value before calculating the rate.

Do not use this conversion rule for retirees.
Assignment Working Hours Uses working hours to convert the monetary N/A
Rate Annualized value and their working hours to an annual value
before calculating the rate.
Periodic Work Schedule Rate Uses work schedule for the payroll period for N/A
Annualized daily and hourly conversions.
11. Complete the rest of the questionnaire.

12. Click Next.
13. Verify the information, and click Submit to create the new element.
The Element Summary page provides additional information, such as input values, processing rules, and
eligibility.
14. Use the Element Overview panel to navigate through the summary page options.
15. Set element eligibility by selecting Actions > Create Element Eligibility in the Element Overview panel.
Refer to Element Eligibility section for more information.
16. Select an input value in the left panel, and provide additional information such as default values, validation
formulas, and required flag.
17. Click Submit and Done.
18. Repeat this process to create a set of elements to support your business needs.
Indirect Elements
During the creation of your elements, depending on the options you selected, the element template may
automatically create related indirect elements. These are also referred to as shadow elements. For further
information, see the Oracle Cloud Human Capital Management for United States: Implementation and Use white
paper (1676530.1) on My Oracle Support.
Element Eligibility
Element eligibility is the method of determining which retirees are eligible for an element. If you want an element to
be available for a retiree, you must setup eligibility. For further information, see the Oracle Cloud Human Capital
Management for United States: Implementation and Use white paper (1676530.1) on My Oracle Support.
Predefined Tax Elements

You must define eligibility and cost the following predefined tax elements:
Tax Element Name Input Value Notes
US Taxation N/A You must define eligibility for this predefined element
as an open link.
Do not cost this element.
Federal Income Tax Tax Calculated
Federal Income Tax Not Taken Tax Calculated You must cost this element the opposite of the
Federal Income Tax base element.
For example, if you are crediting the base element to
account 1234, then you must debit the Not Taken
element from account 1234.

Residence State Income Tax Tax Calculated
Residence State Income Tax Not Taken Tax Calculated You must cost this element the opposite of the
Resident State Income Tax base element.
State Transit Tax Tax Calculated
State Transit Tax Not Taken Tax Calculated You must cost this element the opposite of the State
Transit Tax base element.
Work State Income Tax Tax Calculated
Work State Income Tax Not Taken Tax Calculated You must cost this element the opposite of the Work
State Income Tax base element.
Secondary Element Classifications

Secondary classifications are subsets of the primary classifications. Use them to manage wage basis rules for
deductions and taxes. There could be cases where you need to create a new secondary classification to suit your
business needs. For further information, see the Oracle Cloud Human Capital Management for United States:
Implementation and Use white paper (1676530.1) on My Oracle Support.
Salary Basis
Best practice for Payroll Implementation projects is to setup salary basis and payrolls before adding retirees. A
salary basis allows employers to:
» Establish the period of time for which an retiree’s pension is quoted

» Link a payroll pension element to a salary basis
To set up the salary basis:
1. Sign in to the application with a role that has compensation administrator privileges, such as
CMP_ADMIN_ALL.
2. Navigate to the Compensation work area.
3. Select Manage Salary Basis.
4. Click Create.
5. On the Create Salary Basis page, select the pension element to use for the salary basis and provide the
required information.
Wage Basis Rules

Oracle Fusion HCM for the US provides the wage basis rules at the federal and state levels for use in the taxation of
earnings. This includes rules for primary classifications of supplemental earnings, imputed earnings, and pretax
deductions along with the corresponding secondary classifications. It does not provide wage basis rules for local
taxes. Local taxation is not supported for retiree payments.

For information on wage basis rules as they relate to involuntary deductions, see Oracle Fusion Human Capital
Management for United States: Payroll Involuntary Deductions (1597039.1) on My Oracle Support. Involuntary
Deductions are not supported for retirees.
For further information, see the Oracle Cloud Human Capital Management for United States: Implementation and
Use white paper (1676530.1) on My Oracle Support.
Process Configuration Group

Process configuration groups ensure that the documents you are producing are published to the correct area in the
Document of Records. For further information, see the Oracle Cloud Human Capital Management for United States:
Implementation and Use white paper (1676530.1) on My Oracle Support.
Retiree Record Management

Once the organizational and workforce structures have been defined by the Implementation Team, the user is ready
to manage their retirees’ data in the application. To perform tasks related to person and retiree management, you
would typically sign in to the application using a role connected to a user, such a Human Resource Specialist or
Payroll Specialist, rather than to a member of the Implementation Team.
NOTE: You can load retiree data through file-based loaders instead of direct entry in the application. Refer to
the following document for additional details: HCM Data Loader: Loading Workers (Doc ID 2022624.1)
Adding a Retiree
Adding a retiree is the first task in the retiree lifecycle. There are two basic ways retirees are added:
» On-boarding a retiree
» Transitioning an employee to retiree
NOTE: Before you can add a retiree, you must have already defined all available business units and locations.
Additionally, other payroll values must have been previously defined.
On-Boarding a Retiree
To add a retiree to your organization as a new person record:
1. Select New Person under Workforce Management in the Navigator.
2. In the task list on the right, select Add a Nonworker.
3. On the Identification page, provide the following information in the Basic Information section:
Field Name Value
Start Date Date the person retired
Action Add Non-Worker
Legal Employer ABC Company
Nonworker Type Retiree
4. Provide the following information in the Personal Details section:
Last Name / First Name Name format predefined

Gender Male or Female
Date of Birth Not mandatory for HR implementations, but it is mandatory for payroll
implementations
5. Use the National Identifiers table to enter one of the following:

» Social Security Number
» Individual Taxpayer Identification Number (ITIN)
Typically used by individuals who have a US taxpayer ID but are not eligible to obtain a SSN.
» Taxpayer Identification Number (TIN)

Also known as an EIN. Use this when the payments and Form 1099-R go to a nonperson entity, such as
an estate.
6. Click Next.
7. On the Person Information page, in the Home Address section, provide an address that conforms to the
predefined address format.
All retirees attached to a payroll must have a home address throughout their period of paid retirement. You
cannot delete or end-date the home address of a person who has been assigned to a payroll. When you enter
a new address for a retiree, the task automatically end-dates the old address record for you.
Enter the ZIP Code first to automatically populate the city, county, and state.
To add another address to your retiree’s record, such as a mailing address, do so after completing add retiree
process. On the Manage Person page, select the plus sign next to Addresses. This allows you to add
additional Mailing Address and Resident Tax Address types.
NOTE: You cannot add multiple addresses for a given address type on a given effective date.
8. Specify any of the following optional information:

» Phone and Email
» Marital Status
» Ethnicity
» Citizenship and Visa Information
» Emergency Contacts
9. Click Next.
10. On the Employment Information page, provide the necessary assignment details.
An assignment is required for the retiree to be included in payroll processing and receive payments.
Required fields are:
Field Name Value
Business Unit ABC Company Business Unit
Person Type Retiree
Assignment Status Active - Payroll Eligible
Location ABC Retirees
11. Use the Payroll Details section to associate a TRU and payroll with the retiree.

Unless you opt not to, this association automatically creates a Tax Withholding for Pensions and Annuities card
for the person. Otherwise, you must create the card manually. For further information, see the Manual Tax
Card Creation section, below.
12. Click Next.
13. For retirees eligible for periodic payments, on the Compensation and Other Information page, provide the
salary basis and salary amount.
For information on setting the salary basis, see the Salary Basis section above.
14. Click Next.

15. Review your entered data, and click Submit.
16. Use the Maintain Party and Location Current Record process to add payment method information for your
newly-added retiree.
For further information, see the Banking Setup section above.
Transitioning an Employee to a Retiree

To transition an existing employee into retiree status:
1. Terminate the employee record.

NOTE: There may be cases where the person remains an active employee while also being a retiree. In such
a scenario, you would not terminate the record.

Start Date Date the person retired
Legal Employer ABC Company
Last Name / First Name Name format is predefined
Gender Male or Female
Date of Birth Not mandatory for HR implementations, but it is mandatory for payroll
implementations
6. Use the National Identifiers table to enter one of the following:

» Social Security Number
» Individual Taxpayer Identification Number (ITIN)
An ITIN is typically for individuals who are required to have a US taxpayer ID, but are not eligible to obtain
a social security number.
» Taxpayer Identification Number

Also known as an EIN. Use this when the payments and Form 1099-R go to a nonperson entity, such as
an estate.

7. Click Next.
This returns a warning message that a matching person record already exists.
8. Click Select Person.
9. Click OK on the resulting warning message.
The person's prior personal information automatically populates.
10. Add or update this information as needed.

11. Click Next.
12. On the Employment Information page, provide the necessary assignment details.
An assignment is required for the retiree to be included in payroll processing and receive payments.
Required fields are:
Field Name Value
Business Unit ABC Company Business Unit
Person Type Retiree
Assignment Status Active – Payroll Eligible
Location ABC Retirees
NOTE: The Tax Withholding for Pensions and Annuities card does not automatically establish a TRU
association.
13. Click Next.
14. On the Compensation and Other Information page, provide the salary basis and salary amount if your retiree is
eligible for periodic payments.
15. Click Next.
17. Start the Manage Calculation Cards task, and open the person’s Tax Withholding for Pensions and Annuities
card for editing.
18. Under Associations, click Add and select Create Association.
19. Select the tax reporting unit under Associations.
20. Click Go.
21. Click Actions on the TRU name line, and select Create Association Details for this TRU.
22. Select the assignment number.
23. Click Go.
24. Save and exit.
Issuing Pension Funds to Other Payees

You can configure a retiree’s pension funds to be issued to the following additional payee types:
Payee Configuration
Beneficiary Use the Add Nonworker task in the Person Management work area to
define the person:
» Select the person type of Retiree.

» You must specify their SSN.
» You must specify their Home address.

» Define the retiree as a contact to the beneficiary on the Personal
Information page, including their name and address. This is for
reference purposes only.
When you process payroll, payments are made payable to the
beneficiary.
When you generate the Form 1099-R, it uses the beneficiary’s name,
address, and SSN.
Charity Use the Add Nonworker task in the Person Management work area to
define the charity:

» You must specify the TIN of the charity.
» You must specify a mailing address.
» Define the retiree as a contact to the charity on the Personal
Information page, including their name and address. This is for
reference purposes only.
When you process payroll, payments are be made payable to the charity.
When you generate the Form 1099-R, it uses the charity’s name, address
and TIN.
Guardian or Custodian For retirees whose payments are to be issued to a guardian or custodian,
define the retiree’s person record normally, with the following exceptions:
» Address Line 1: Use this line to specify “care of” the guardian’s
name.
For example: C/O John Doe
» Address Line 2: Enter the retiree or guardian address, whichever is
appropriate.
When you process payroll, payments are made payable to the retiree in
care of their guardian.
When you generate the Form 1099-R, it includes in the same information.
Estate or Trust Use the Add Nonworker task in the Person Management work area to
define the estate or trust:

» You must specify its TIN.
» As the nonworker's name, enter it as: The Estate of <retiree's name>.
» If there is a known executor, specify Address Line 1 as: C/O <name>,
Executor.
» Enter the estate or trust address on the remaining address lines.
» Enter the retiree's name and address as a contact to the estate or
trust on the Personal Information page. This is for reference
purposes.
When you process payroll, payments are made payable to the estate or
trust.
When you generate the Form 1099-R it uses the estate or trust’s name
and TIN.

When the Person is an Employee and Retiree at the Same Time
Employees and retirees must be maintained in separate PSUs and TRUs. In cases where a person is both an
active employee and retiree, you must set up the employee record and retiree record on different PSUs and TRUs.
The person would have one person ID and two Payroll Relationships.
Taxation is based on the Payroll Relationship Action ID. Retirees and employees each have a unique Payroll
Relationship Action ID.
» If payments and taxation occur on the Retiree Payroll Relationship ID, then the payroll process reports the
wages and taxes on the 1099-R and not the W-2.
» If payments and taxation occur on the Employee Payroll Relationship ID, then the payroll process reports the
wages and taxes on the W-2 and not the 1099-R.
Maintaining Retiree Person Information

Once the on-boarding process is complete, you can modify the person and employment information as needed.
Maintaining Person Information

To maintain a retiree’s person information:
1. Select Person Management under Workforce Management in the Navigator.

2. Search for and select the person record.
This starts the Manage Person task.
3. Use the Manage Person tabs to view the complete set of person information.
4. Select either Edit > Correct or Edit > Update to modify the information in any section.
Use Correct to reflect that the change is being made to resolve an error.
Use Update to reflect that the change is being made as a result of a change in the retiree’s data.
5. Click Submit when finished.
Maintaining Employment Information

To maintain a retiree’s employment information:
1. Select Person Management under Workforce Management in the Navigator.
This starts the Manage Person task.
3. Select Manage Employment.
4. Select either Edit > Correct or Edit > Update to modify the information in any section.
Use Correct to reflect that the change is being made to resolve an error.
Use Update to reflect that the change is being made as a result of a change in the retiree’s data.
5. Click Submit.
Adding a Second Assignment

To add an additional assignment to a retiree’s employment information:
1. Follow steps 1 through 3 under Maintaining Employment Information above.

2. Select Edit > Update.
3. Enter an Effective Start Date (or accept the default).

4. Select Add Assignment.
5. Click OK.
6. Enter employment information.
Mark the person as work-at-home.
7. Click Next.
8. Enter compensation details.
9. Click Next.
10. Review the information and click Submit.
11. Click Yes.
You can view and access the new assignment from the Employment Tree. The last assignment added is the one
first displayed in the Manage Employment UI when it is initially accessed. The other assignments may be accessed
using this tree hierarchy.
Managing Retirees Living Abroad

The payroll process supports taxation for pension payments in the United States only. If you have retirees who live
outside of the US and you want their correspondence to be mailed to them abroad, you must:
1. Set up a Mailing Address for the retiree for the country in which they live.
2. Set the Primary Mailing address to the new mailing address.
3. Ensure the Home address remains an address in the United States, as that is the address the payroll process
uses for tax purposes.
The retiree’s payslip and Form 1099-R prints with the Mailing Address.
Managing Retirees Living in States that Do Not Tax Pension Payments

Some states do not tax pension payments, such as Illinois. Because state tax calculation uses the same Vertex tax
rules for employees and retirees, if you have retirees living in such a state, you must:
1. Use the Manage Calculation Cards task to edit the person’s Tax Withholding for Pensions and Annuities card.
2. Mark the Regional component of their Tax Card as “Exempt from Wage Accumulation”.
Payroll Processing
There are several factors that make up the payroll processing.
Taxation Within Oracle Fusion HCM

Retiree taxation uses the same Vertex taxation rules that are used for employees for both FIT and SIT calculation.
Local taxes for retirees are not supported. Vertex provides all the statutory compliance for the Oracle Fusion Global
Payroll engine, but it is important for you to understand how the payroll process handles US taxation. Overrides of
flat rates are available at the Organization Card level for retiree taxation. For further information, see the “Creating
Federal Tax Rules” and “Creating Regional Tax Rules” sections under the “Legal Entity Calculation Cards” section.
Retiree Tax Withholding for Pension and Annuity Payments Card

The Retiree Tax Withholding for Pension and Annuity Payments card is the default tax card for retirees. In most
cases, it is created automatically when you on-board the retiree. This tax card captures information such as filing
status, number of allowances, and tax exemptions. Without overrides on the organization card or individual tax
card, it uses defaults of Single for filing status and 0 allowances.

For information on setting flat rate overrides on the organization cards, see the Legal Entity Calculation Cards
section above.
Setting Up Automatic Card Creation

To ensure new retirees get a Retiree Tax Withholding for Pension and Annuity Payments Card:
1. Use the Manage Features by Country or Territory task to set the SELECTED_EXTENSION parameter to either
PAYROLL or PAYROLL_INTERFACE, as appropriate to your implementation.
2. Confirm that element eligibility has been created for the US Taxation element. This element is automatically
added to a retiree’s element entry when the association to the Tax Reporting Unit is completed.
Creating the Card Manually

There may be situations where you need to create a tax card manually for a retiree. This can occur if you did not
select a TRU during the onboard processing of your person.
For these retirees, to manually create the Retiree Tax Withholding for Pension and Annuity Payments Cards:
1. Navigate to the Payroll Calculations work area.

3. From the Actions icon, select the Manage Calculation Cards task.
4. Click Create.
5. Enter an appropriate Effective-As-of-Date, and select Tax Withholding for Pension and Annuity Payments for
Name.
6. Enter information as appropriate at the Federal level.
7. Click Save.
8. Under the Withholding Details, click Add Withholding Information.
9. Search for and select the appropriate state.
10. Enter information as appropriate for the state.
11. Click Save.
12. Under Associations, click Create.
13. Select the tax reporting unit, and click Go.
14. Click Actions for that TRU you just added.
15. Click Create Association Details.
16. Select the assignment number, and click Go.
17. Click Done. This creates the US Taxation Component.
Creating the Card Through the HCM Spreadsheet Data Loader

There are cases where you may have multiple retirees without tax cards, such as after loading their person data
through the File-Based Loader utility. Rather than create their tax cards manually, you can use a HCM Spreadsheet
Data Loader to create cards for all of them.
To define these cards:

1. Ensure your retirees have one or more assignments on their records that require tax cards.
2. Log in as a user with Data Exchange privileges.
3. From the Data Exchange work area, select Manage Spreadsheet Templates.
4. Search for and select US Retiree Federal Tax Withholding Card.
5. Click Preview.
6. Click Open and then Connect.

7. Select the Spreadsheet Loader tab at the top, and then click Create Data Set.
The spreadsheet generates a name for you and several fields for you to populate.
8. Click OK.
9. Enter the required fields:
Card Sequence Specify the order of the cards as they should appear in the Manage
Calculation Cards task. Such as 1, 2, 3, and so on.
Effective Start Date Use the same the value in all effective date fields.
Assignment Number The assignment number for each retiree.
LDG Specify your US LDG.
TRU Options are limited to those TRUs in the LDG you selected.
10. Click More and then Save.

11. Click More and then Upload.
12. In the Data Exchange work area, start the Import and Load Data task. This allows you to view the progress of
your tax card import and load.
Once the data load process completes, use the Manage Calculation Cards task to view each retiree’s tax card
record.
Creating Tax Card Associations Through the HCM Spreadsheet Data Loader
For cases where you have multiple retirees with no tax card associations, you can use the HCM Spreadsheet Data
Loader to create the tax card association.
To add a TRU association to the tax cards:
1. Log in as a user with Data Exchange privileges.

2. From the Data Exchange work area, select Manage Spreadsheet Templates.
3. Search for and select US Retiree Tax Withholding Card Association.
4. Click Preview.
5. Click Open and then Connect.
6. Select the Spreadsheet Loader tab at the top, and then click Create Data Set.
The spreadsheet generates a name for you and several fields for you to populate.
7. Once your data set name is created, click OK.

8. Enter the required fields:
Card Sequence Specify the order of the cards as they should appear in the Manage
Calculation Cards task. Such as 1, 2, 3, and so on.
Effective Start Date Use the same the value in all effective date fields.
LDG Specify your US LDG.
Assignment Number The assignment number for each retiree’s as it pertains to this TRU
association.
Component Sequence Specify the order of the card associations as they should appear in the
Manage Calculation Cards task.

TRU Options are limited to those TRUs in the LDG you selected.
9. Click More and then Save.

10. Click More and then Upload.
11. In the Data Exchange work area, start the Import and Load Data task. This allows you to view the progress of
your tax card association import and load.
Once the data load process completes, use the Manage Calculation Cards task to view each retiree’s tax card
association record.
Adding a Second TRU Association for a Second Assignment

If a retiree has more than one type of payment distribution, then they have multiple assignments associated to
different TRUs. For information on the relationship between TRUs and distribution codes, see the Organization
Structure Models Supported by the US Localization section.
You must capture the distribution code for each payment type. Establish an association with the proper TRU. For
these retirees, you must assign them multiple Retiree Tax Withholding for Pension and Annuity Payments cards,
one for each TRU.
Multiple cards enables the payroll process to apply rules and rates defined for the TRU when calculating tax
deductions, such as:
» Which rates and rules held at the TRU level apply to the calculation of the components
» How the calculations are aggregated for tax reporting
If a retiree is eligible for multiple distribution codes or code combinations, you must:
1. Associate them with the appropriate TRUs
2. Specify their allowance settings as defined by their W-4Ps
To add a second assignment and TRU association to a new tax card:
1. Navigate to the Person Management work area, and search for your retiree.
2. Click Actions and then Personal and Employment.
4. Click Edit and Update.
5. Enter your effective date.
6. In the Action LOV, select Add Assignment.
7. Click OK.
8. Enter the required information for the second assignment, including applicable payroll and compensation
details. Mark the person as work-at-home.
9. Submit your entry. The second assignment generates a new assignment number.
11. Search for and select the person record for the second assignment.
12. Select Manage Calculation Cards.
13. Click Create.
14. As the effective date, enter the same date you used to create the second assignment.
15. Select Tax Withholding for Pension and Annuity Payments as the name.
16. Click Continue.
17. Under Associations, click Add and select Create Association.
18. Select the Tax Reporting Unit under Associations for which the second assignment pertains to.
19. Click Go.

20. Click Actions on the TRU name line, and select Create Association Details for the new TRU.
21. Select the appropriate assignment number.
22. Click Go.
23. Enter the appropriate federal and state withholding information as needed.
24. Click Save.
The Reporting Information card automatically creates the same associations as the tax cards.
Exempting Retirees from Taxes and Wage Accumulation

On the tax card, each tax component group has a Withholding Exemption section. To exempt a retiree from tax
withholding or wage accumulation, mark the following as Yes:
Exempt from (component) Income Tax If you select Yes, then the payroll calculation Excludes this tax from withholding.
Exempt from Wage Accumulation If you select Yes, then the payroll calculation Excludes this tax from withholding,
and does not accumulate wages for the component.
If you mark both as exempt, the payroll process ignores the Exempt from Wage Accumulation setting.
Tax Calculation
Oracle Fusion Global Payroll automatically calculates your taxes when you perform a payroll run. The following
describes the rules it uses when doing so.
Payroll Processing
When you perform a payroll run, the payroll process:
1. Derives the resident tax address using the following hierarchy:
Address Type Priority
US Resident Tax Address 1
Home Address 2
2. Determines the related withholding status and any additional information from the tax calculation card.
3. Passes this information to Vertex for calculation.
Other Considerations
Your tax calculations are also impacted by the following:
» Resident and work location tax addresses are derived by the following:
» Work default tax address is determined by the retiree’s home address.
All retirees must be assigned work-at-home status. For further information, see the Adding a Retiree
section above.
» Resident Address hierarchy

» State reciprocity rules
For further information, see the State Reciprocity Agreements: Explained topic in the Help Portal.
» Retiree payments that are subject to 1099-R rules are not subject to SUI, SDI, FLI, Social Security, or Medicare
taxes. Therefore the payroll process does not calculate them
» Wage basis rules determine the taxable income

For further information, see the Wage Basis Rules section above.
» Payroll run type
Run Type Description
Supplemental The payroll process taxes all supplemental earnings at the current FIT and SIT supplemental
tax rates, unless you have set a rate override on the Organization calculation card or retiree’s
tax card.
Regular If you have set the supplemental earnings element run type to process separately or pay
separately, these elements tax at the supplemental rate, as described above. Otherwise they
tax at the W-4 rate.
» Organization calculation cards capture overrides to tax rates

For further information, see the Legal Entity Calculation Cards section above.
» Retiree Tax Withholding for Pension and Annuity Payments card captures a retiree’s filing status, exemptions,
and any overrides at the federal and state levels
» When using the percentage method tax calculation, Vertex automatically rounds the withholding to the nearest
whole dollar for the following states:
» Colorado
» Idaho
» Maine
» Missouri
» Montana
» North Carolina
» Oklahoma
» West Virginia
Flat Rate Withholding for Earnings: How the Rates Are Determined
In cases where there are flat tax rate overrides, the payroll process must determine which rate to use for the
following taxes:
» FIT
» SIT for any state with an override
The payroll process uses the following hierarchy to determine the rate:
1. Check the person's Retiree Tax Withholding for Pension and Annuity Payments card for the following
withholding rule override values:
» Regular Amount
» Regular Rate
» Supplemental Rate
For further information, see the Other Considerations section above.
2. If the process finds no retiree override, it checks for the following overrides on the TRU:
» Federal Income Tax for 1099-R
» State Income Tax for 1099-R
For further information, see the Other Considerations section above.
3. If the process finds no TRU-level overrides, it uses the default Vertex tax rules.

Calculation Cards for Retirees
There are two types of calculation cards for retirees:
» Retiree Tax Withholding for Pension and Annuity Payments card (described in the previous section)
» Reporting Information Card
Reporting Information Card

The Reporting Information card provides additional information for person-level federal reporting. In most cases, it is
created automatically when you on-board the retiree. The majority of the fields in this card are used for third-party
quarterly tax filing. The card includes a Retiree Reporting Information calculation component by default. Use the
Manage Calculation Cards task in the Payroll Calculation work area to update this card.
This card includes a Retiree Reporting Information calculation component for every retiree tax card with a TRU
association. Each TRU represents a Distribution Code for generating the appropriate information on each 1099-R
for that retiree.
For example, you set up your retiree with two tax cards with the following associations:
» TRU 1 (Distribution Code 1) – assignment 1

» TRU 7A (Distribution Code 7A) – assignment 2
In this case, the Reporting Information card includes two Retiree Reporting Information calculation components, one
for each TRU. Although the components are created automatically for each TRU, the association to the
assignments is not. You must edit each Retiree Reporting Information component and create an association to the
appropriate assignment number:
1. Use the Manage Calculation Cards task to open the Reporting Information Card for editing.
2. Click Associations.
3. Select the line with your first TRU.
4. Under the Association Details section, click Create.
5. Select the assignment number to be associated to TRU 1.
6. Click OK.
7. Click Save.
8. Repeat these steps for the second TRU, using the second assignment number.
Setting Up Automatic Card Creation
As long as you have a TRU association on the tax card, the Manage Calculations Card task automatically creates
the reporting card.
Setting Enterable Values on the Reporting Information Card
The Retiree Reporting Information component on a retiree’s Reporting Information card provides optional
information for your Forms 1099-R. The available fields are:
» Account Number
» Annuity Percentage
» FATCA Filing Requirement
» First Year of Designated Roth Contribution
» Taxable Amount Not Determined
» Total Distribution

» Total Distribution Percentage
» Traditional, SEP, or SIMPLE IRA
How Retiree Calculation Cards Work Together

A retiree’s tax card and TRU association has a one-to-one relationship with the Reporting Information card. For
every tax card TRU association, there must be a corresponding Retiree Reporting Information component.
When you create a TRU association on the tax card, the association process automatically creates a Reporting
Information card with a Retiree Reporting Information component associated to the same TRU.
Terminating a Retiree
If all of a retiree’s pension payments end (all distributions are completed), the retiree’s payroll relationship must be
terminated.
To terminate a retiree’s payroll relationship:
1. Select Manage Work Relationship in the Person Management work area.

2. On the Manage Work Relationship page, select Terminate from the Actions menu.
3. On the Terminate Work Relationship page, enter the details of the termination, including the termination reason.
4. Click Submit.
Assigning Salary Information to a Retiree for Periodic Pension Payments

Once you have completed the setup for a salary basis, assign salary information to your retiree to pay periodic
pension payments:
1. Sign in to the application with a role that has compensation manager privileges.
2. Navigate to the Compensation work area.
3. Select Manage Salary, and then search for and select the retiree.
4. On the Manage Salary page, enter a salary basis and salary amount in the Salary Details section for the
pension payment to be made each pay period.
5. Click Continue.
6. Review your changes, and click Submit.
When you save this record, an element entry with the specified start and end dates is automatically generated.
You can view the entry on the Manage Elements page.
NOTE: If your retiree receives a nonqualified distribution from an employee section 409A plan, these payments
are considered W-2 wages, and must be paid and reported as such. You do not pay nonqualified 409A plan
distributions under your person’s retiree person record. You must pay them under their employee person
record.
Assigning a Payroll to a Retiree

To pay a retiree, you must assign a payroll definition to them.
Assigning a Payroll to the Retiree

After the hire process, if a payroll needs to be assigned or changed, follow these steps:
1. Sign in to the application with a role that has payroll privileges.
2. Select the Manage Payroll Relationships task in the Payroll Calculations or Payment Distribution work area.
3. Search for and select the retiree.

4. In the Payroll Details section of the Manage Person Details page, add the payroll.
Transferring a Retiree to a New Payroll

To assign a retiree to a new payroll:
1. Start the Manage Payroll Relationships task in the Payroll Calculation work area.
3. Enter the appropriate Effective As-of Date.
4. Select the appropriate assignment under the Payroll Employment Tree.
5. Select Actions > Transfer Payroll under Payroll Details.
6. Enter the new payroll, and click Save.
7. Select the old payroll under Payroll Details, and review the element duration dates.
8. Edit the Final Close date to the last check date you will pay the retiree out of the old payroll, and click Save.
Refer to the Assigning and Transferring Payrolls topic in the Help Portal for a demonstration and the Transferring a
Person's Payroll from Weekly to Semimonthly topic for an example.
Assigning Payment Methods to the Retiree

Before adding payment methods to a retiree, you must configure the banks and branches in the system and assign
a payroll definition to the retiree. By default, all retirees inherit the payroll definition’s OPM. If you want to override
this for a specific retiree, you need to create a PPM and select an alternate OPM.
NOTE: Before you can define PPMs, you must use the CE_USE_EXISTING_BANK_BRANCH profile option to
determine how retirees enter their bank details. See the Banking Setup section for information on setting this
profile option.
To assign PPMs:
1. Select the Manage Personal Payment Methods task in the Payroll Distribution work area.
3. On the Manage Personal Payment Method page, click Create.
4. On the Create Personal Payment Method page, select the Organization Payment Method for this retiree.
5. If the payment type is Direct Deposit, you must add a bank account and provide banking details.
NOTE: When you pick an existing branch name, the Oracle Fusion Financials for the Americas plug-in
populates the Routing Transit Number and it becomes read-only. If you are creating a new branch, the Routing
Transit Number is an editable field. You must enter a branch Routing Transit Number for a new branch.
6. Add multiple payment methods as needed.

7. Use the Payment Amount Type and Percentage fields to manage distribution across different payment
methods.
Processing International ACH Transfers

Use the Make EFT Payment process to generate the IAT electronic payment file.
To generate an IAT EFT payment to a retiree:
1. Create the International organization payment method (OPM).

Refer to the Organization Payment Methods section for steps to create the OPM and to enter the EFT details.

2. Attach the OPM to a payroll.
Refer to the Payroll Definitions section for steps to add the OPM to a payroll.
3. Add primary mailing foreign address for the retiree.
4. Create IAT Personal Payment Method for the retiree.
For IAT payments, use the Payroll Batch Loader to add a personal payment method country-specific bank
account details for a retiree. The batch loader adds the Country code during the Create External Bank Account
task action.
5. Run the Make EFT Payments process for the OPM with a payment type of International Transfer. Ensure you
select the International EFT report category.
Payroll Processes
There are various payroll processes within Oracle Fusion HCM. For further information, see the Oracle Cloud
Human Capital Management for United States: Implementation and Use white paper (1676530.1) on My Oracle
Support.
Tax Troubleshooting
Before contacting Oracle Support for any taxation issues, refer to the Tax Troubleshooting section of the Oracle
Cloud Human Capital Management for United States: Implementation and Use white paper (1676530.1) on My
Oracle Support.
Additional Set Up Reference Material

Oracle Fusion HCM may require additional set up in the following areas:
» Vertex
» User Interface
» Predefined Payslip Template
» Check Template for MICR Codes
Vertex Installation
Vertex installation is a mandatory step for US Payroll and US Payroll Interface clients. Oracle Fusion HCM payroll
processing does not work without Vertex data. For further information, see the Oracle Cloud Human Capital
Management for United States: Implementation and Use white paper (1676530.1) on My Oracle Support.
User Interface Configuration

Customers may rebrand Oracle-delivered user interfaces and configure them to fit their corporate needs. For further
information, see the Oracle Cloud Human Capital Management for United States: Implementation and Use white
paper (1676530.1) on My Oracle Support.
Predefined Payslip Template Configuration

The predefined payslip template:
» Produces both the online and printed payslips, based on the extract delivery option you set
» Provides requirements as established by certain states

As with any other predefined report templates, you can configure the payslip template to meet your organization’s
needs. For further information, see the Oracle Cloud Human Capital Management for United States: Implementation
and Use white paper (1676530.1) on My Oracle Support.
Check Template Configuration for the MICR Codes

As each bank uses a different MICR code on their checks, you must configure the routing and bank account
numbers to ensure the Generate Check Payment process prints each of them correctly. For further information, see
the Oracle Cloud Human Capital Management for United States: Implementation and Use white paper (1676530.1)
on My Oracle Support.
Appendix A: Worked Examples

The following are some working examples on how to onboard your retiree for different scenarios.
On-Boarding a Retiree Eligible for Multiple Distribution Types

The retiree is eligible for retirement payments. They have requested that a portion of their account be rolled over to
an IRA. The rollover would be non-taxable. The remainder of the account they select to receive in monthly
installments. Therefore this person is eligible for two distribution types: Code 7 and Code G.
This scenario requires:
» Two TRUs, one for each distribution type

» Two retiree assignments
» Tax card for each assignment that is associated with each TRU
TRU Configuration
You must define TRUs for Distribution Code 7 and Distribution Code G. This assumes you have already setup your
retiree PSU and any required legal addresses, business units, and locations.
1. From your implementation project, navigate to the Manage Legal Reporting Unit task.
2. Click the link under the Select Scope column.
3. Select the appropriate Legal Entity, then for the Legal Reporting Unit LOV, click Create New.
4. Click Apply and Go To Task.
5. Click Create, and update the following fields:
Field Name Value
Territory United States
Name Distribution Code 7
Start Date 01/01/01
Legal Reporting Unit Registration Number 123456
Legal Address 123 Main St, Red Shores, CA 94065

7. Select the link under the Select Scope column for the Manage Legal Reporting Unit task.
8. For the Legal Reporting Unit LOV, click Select and Add.
9. Click Apply and Go To Task.
10. Select the line with your newly created LRU, and click Save and Close.

12. Start the Manage Legal Reporting Unit Registrations task.
13. Click Add, and then update the following fields:
Field Name Value
Jurisdiction United States Federal Tax
Registered Address 123 Main St, Red Shores, CA 94065
Registered Name Acme Company, Inc

NOTE: This is the name as it would appear on Form 1099-R.
EIN or TIN 12-3456789
Start Date 01/01/01

15. Start the Manage Legal Reporting Unit Registrations task.
16. Click Add, and then update the following fields:
Field Name Value
Jurisdiction California Income Tax
Registered Address 123 Main St, Red Shores, CA 94065
Registered Name Acme Company, Inc

NOTE: This is the name as it would appear on Form 1099-R.
Legal Entity Registration Number 12-3456789
Start Date 01/01/01

18. Start the Manage Legal Reporting Unit HCM Information task.
19. Select the Tax Reporting Unit and Reporting Establishment check boxes.
20. Click Next.
21. Select the Tax Reporting Unit tab.
22. Select the Federal link, and update the following fields:
Field Name Value
Person Type for Payroll Process Retiree
Form 1099-R Client Identifier 123456
Form 1099-R Distribution Code 7
23. Click Submit.

24. Click Done.
25. Repeat these steps to configure a second TRU for Distribution Code G.
Elements and Salary Basis Configuration

To pay your retiree for periodic payments you must set up the following elements:
» Recurring pension element and tie it to a salary basis

By tying it to a salary basis, you can easily do periodic increases through the Manage Salary task, such as a
cost of living increases.
» Lump sum element for the rollover payment, using the Supplemental Earnings primary classification and the
Retiree Nontaxable Payments secondary classification
» Voluntary deduction element to create the rollover payment for the rollover institution
Setting Up the Periodic Pension Element
To set up your recurring periodic pension payment element:
1. Start the Manage Elements task.

2. Click Create.
3. Select the LDG.
4. Select a primary classification of Standard Earnings.
5. Select a secondary classification of Regular Not Worked.
6. Select a category of Standard.
7. Click Continue, and update the following information needed for this periodic pension payment element:
Field Name Value
Name Pension
Reporting Name Pension
Effective Date 01/01/01
Input Currency US Dollar
Should every person eligible for the element automatically receive it? No
What is the earliest entry date for this element? First Standard Earning Date
What is the latest entry date for this element? Last Standard Process Date
At which employment level should this element be attached? Assignment Level
Does this element recur each payroll period, or does it require explicit entry? Recurring
Process the element only once in each payroll period? Yes
Can a person have more than one entry of this element in a payroll period? No
Process and pay element separately or with other earnings elements? Process and pay with other earnings
8. Click Next, and update the following information:
Field Name Value
What is the calculation rule? Flat Amount
What is the default periodicity of this element? Periodically
Periodicity Conversion Rule Standard Rate Annualized
How do you want the work unites to be reported? None
Is this element subject to proration? No
Is this element subject to retroactive changes? Yes
Retro Group Entry changes for Retro

Us this element to calculate a gross amount from a specified net amount? No
Should this element reduce regular earnings? No
Should this element be included in the earnings calculation of the FLSA overtime No
base rate?
Should this element be included in the hours calculation of the FLSA overtime base No
rate?
9. Click Next
10. Review your setup, and then click Submit.
11. Create eligibility as needed.
Setting Up the Lump Sum Payment Element
For the lump sum rollover payment, use the Manage Elements task to define an element with the following values:
Field Name Value
Primary Classification Supplemental Earnings
Secondary Classification Retiree Nontaxable Payments
Name Lump Sum Rollover NT
Reporting Name Lump Sum Rollover NT
Does this element recur each payroll period, or does it require explicit entry? Nonrecurring
Setting Up the Rollover Deduction Element
To set up your nonrecurring deduction element:
1. Start the Manage Elements task.

2. Click Create.
3. Select the LDG.
4. Complete the following information:
Field Name Value
Primary Classification Voluntary Deduction
Secondary Classification Leave blank
Name Rollover Deduction
Reporting Name Rollover Deduction
Should every person eligible for the element automatically receive it? No
What is the earliest entry date for this element? First Standard Earning Date
What is the latest entry date for this element? Last Standard Process Date
At which employment level should this element be attached? Assignment level
What should happen when there are insufficient funds to cover the deductions? Take a partial deduction, but do not create
arrears.
Does this element recur each payroll period, or does it require explicit entry? Nonrecurring
Process the element only once in each payroll period? Yes

Can a person have more than one entry of this element in a payroll period? No
5. Click Next, and enter the following information:
Field Name Value
What is the calculation rule? Fixed Amount deduction
Is the element subject to retroactive changes? No
Processing Stop when the Total is reached? No
6. Click Next, review your entries, then click Submit.

7. Setup eligibility as needed.
Setting up a Pension Salary Basis
To create your salary basis and tie your newly created pension element to it, you must have Salary Basis privileges.
1. Start the Manage Salary Basis task.
2. Click Create.
3. Enter the following required information:
Field Name Value
Name Pension Salary
LDG Acme, Inc.
Salary Basis Type Salary Amount is Determined by User
Frequency Payroll Period
Payroll Element Pension
Input Value Amount
On-Boarding the Retiree

Adding your retiree involves the following:
1. Define the person record.

2. Define the second assignment.
3. Create the second tax card.
4. Create assignment associations on the reporting card.
5. Manage the element entries.
Defining the Person Record
To on-board your retiree as a new person record:

Start Date 01/01/18

Legal Employer Acme Company, Inc.
Last Name / First Name Smith / John
Gender Male
Date of Birth 02/15/1950
National ID Type Social Security Number
National ID Enter the person’s SSN formatted as xxx-xx-xxxx
5. Click Next.
6. On the Person Information page, in the Home Address section, provide an address that conforms to the
predefined US address format:
987 Main St
Redwood Shores, CA 94065.
7. Click Next.
8. On the Employment Information page, provide the required fields:
Business Unit Acme Inc
Person Type Retiree
Location Acme California
Hourly Paid or Salaried Salaried
Tax Reporting Unit Distribution Code 7
Payroll Monthly
9. Click Next.
10. On the Compensation and Other Information page, provide the following details:
Salary Basis Pension Salary
Salary Amount Enter the monthly amount the retiree is to receive
11. Click Next.

13. With the retiree electing to claim Single and Zero for their marital status and number of allowances for this
payment, no further changes are required on the tax card.
Defining the Second Assignment
Next, you must setup the second assignment for your retiree, since they have elected for two distribution types.
They do not receive any payments from the lump sum distribution, because it is being rolled over. However, you
must setup the payment and process it, so that the Form 1099-R reports it properly.

The assignment for the periodic payments was defined automatically when you created the person record.
To define a second assignment for the lump sum rollover payment:
1. Navigate to the Person Management work area, and search for and select your retiree.
2. Click Actions and then Personal and Employment.
4. Click Edit.
5. Enter your effective date.
6. In the Action LOV, select Add Assignment.
7. Enter the remaining details for the second assignment, including the payroll and compensation details.
For this example, there would be no salary required, since you are using this assignment to make a one-time
lump sum payment.
Ensure the retiree is identified as work-at-home.
8. Submit your entry.

The second assignment generates a new assignment number.
Creating a Second Tax Card
Because this person is receiving two distribution types, they require two tax cards, each with a different TRU
association. This results in two Retiree Reporting Calculation components on the reporting card, one for each TRU.
The tax card first was created automatically when you on-boarded the person.
To add a second tax card to the retiree’s record for the second TRU:

2. Start the Manage Calculation Cards task.
3. Click Create.
4. Select Tax Withholding for Pension and Annuity Payments.
5. Click Continue.
6. Select the Tax Reporting Unit under Associations for which the second assignment pertains to.
7. Click Go.
8. Click Actions and Create Association Details to the new TRU.
9. Select the appropriate assignment number.
10. Click Go.
You do not need to configure any federal or state details for this tax card, as this payment is not taxable.
11. Click Save.

Creating Assignment Associations on the Reporting Card
Although the retiree reporting components were automatically created for each TRU when you established the
associations on the tax card, the associations to the assignments were not. You must edit each Retiree Reporting
Information Card and create an association to the appropriate assignment number for each component:
1. Use the Manage Calculation Cards task to open the person’s reporting card for editing.
2. Click Associations.
3. Select the line with the first TRU.

4. Under the Association Details section, select Create.
5. Select the assignment number you want to associate with this TRU.
6. Click OK.
7. Click Save.
8. Repeat these steps for the second TRU.
Managing Element Entries for the Nontaxable Rollover Payment
Use element entries to add the following elements to the second assignment for the pay period you are processing:
» Retiree Nontaxable Payments

» Rollover Deduction
To add these elements to the pay period, using the appropriate amounts:
1. Navigate to the Manage Element Entries task for this person.

2. To add your lump sum payment element:
a. Click Create.
b. Enter your effective date.
c. Enter the element name: Lump Sum Rollover NT
d. Select the second assignment number for this element.
e. Click Continue.
f. In the Amount field, enter the amount of the payment.
g. Click Submit.
3. To add your rollover deduction element:
a. Click Create.
b. Enter your effective date.
c. Enter the element name: Rollover Deduction
d. Select the second assignment number for this element.
e. Click Continue.
f. In the Amount field, enter the amount you want rolled over.
g. Click Submit.
NOTE: When you process this retiree’s payroll, the payroll process calculates:
1. Periodic pension payments associated with Assignment 1, using taxes withheld based on single zero.
2. A nontaxable lump sum payment associated with Assignment 2. This amount is entirely rolled over.
This payment would not have any net pay.
4. Submit a check request to your Accounts Payable department for generation of a check made payable to the
rollover institution.
Setting Up an Estate for a Deceased Retiree

In cases where a retiree passes away, the remaining pension payments may be paid out in a lump sum to their
estate.
In this example, you have already:
» Defined a TRU for Distribution Code 4

» Configured a non-recurring payment element
» Terminated your original retiree record

To add the Estate Record:

Start Date 01/01/18
Legal Employer Acme Company, Inc.
Last Name The Estate of Benjamin Jones
Gender Male
Date of Birth 02/15/1950
National ID Type Taxpayer Identification Number
National ID TIN in the format of xxxxxxxxx.
5. Click Next.
6. On the Person Information page, in the Home Address section as follows:
Address Line 1 C/O Jill Jones Executor
Address Line 2 Executor’s Address
City Executor’s City
State Executor’s State
Zip code Executor’s zip code
7. Click Next.
8. On the Employment Information page, provide the required fields:
Business Unit Acme Inc
Person Type Retiree
Location Acme California
Hourly Paid or Salaried Leave blank
Tax Reporting Unit Distribution Code 4
Payroll Monthly
9. Click Next.

10. Click Next.
This allows you to make a one-time payment to the Executor of Benjamin Jones estate, and the 1099-R for this
payment would be in the estate’s name and TIN.
Additional Reference Documentation

Utilize the following information to find other documents that may be useful for your implementation.
United States
United States Information Center (Doc ID 2063588.2). Contains all US specific information on HR, Benefits, and
Payroll.
» Legislative Announcements
» Whitepapers
» Other useful US information
Global Human Resources
Document Name Location: Book List – Cloud Global Human Resources
Oracle Cloud Global Human Resources Using Global Navigate to the Oracle Help Center > Cloud > Applications Tab (next to Get Started) > Global
Human Resources Human Resources > Release (select your appropriate release) > Books (on the left panel)
This takes you to all of the documents listed in this chart.
Oracle Cloud Global Human Resources Implementing
Global Human Resources
Global Payroll Interface
Oracle Cloud Global Human Resources Using Global Navigate to the Oracle Help Center > Cloud > Applications Tab (next to Get Started) > Global
Payroll Interface Human Resources > Release (select your appropriate release) > Books (on the left panel)
Oracle Cloud Global Human Resources Implementing
Global Payroll Interface
Global Payroll
Oracle Cloud Global Human Resources Implementing Navigate to the Oracle Help Center > Cloud > Applications Tab (next to Get Started) > Global
Global Payroll Human Resources > Release (select your appropriate release) > Books (on the left panel)
Oracle Cloud Global Human Resources Using Global
Payroll
Fusion Cloud Payroll: How Earnings are Paid and Taxed Navigate to My Oracle Support and in the search field enter the Doc ID number.
in Supplemental Run vs Regular Payroll Run? (Doc ID
1997404.1)
General
Oracle Fusion Applications Help (external access) https://Fusionhelp.oracle.com

How to Use My Oracle Support Hot Topics Email to Navigate to My Oracle Support and in the search field enter the Doc ID
subscribe to Fusion US Legislative Product News (Doc
ID 1677334.1)
Oracle Fusion Applications Documentation: Oracle https://docs.oracle.com/en/cloud/saas/global-human-resources/18b/books.html

Fusion Human Capital Management
Oracle HCM Cloud: Data Loading and Data Extraction Navigate to My Oracle Support and in the search field enter the Doc ID
Best Practices (Doc ID 2043581.1)
Oracle Fusion Payroll Batch Loader User Guide (Doc ID Navigate to My Oracle Support and in the search field enter the Doc ID
2030268.1)

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Oracle Cloud Human Capital Management for the US: Implementation and Use Guide
January 2018
Authors: Kim Linden
Contributing Authors: John Lawson

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Oracle Fusion Human Capital Management For RETIREES US Implementation and Use White Paper v1.9

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Oracle Fusion Human Capital Management For RETIREES US Implementation and Use White Paper v1.9

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Oracle Cloud Human Capital Management for

Product Extension Parameter 2

Product Extension Offerings 2

Product Extension Management 3

Address Style Settings 4

Legal Employers and Payroll Statutory Units 4

Legal Reporting Units and Tax Reporting Units 4

Organization Structure Models Supported by the US Localization 5

Creating Legal Entities 6

Identifying the LDG 6

Additional Information for Legal Employers and PSUs 6

Legal Entity Calculation Cards 7

Legal Reporting Units 7

IMPLEMENTATION AND USE

Managing Workforce Structures 13

Configuring Person Definitions 13

Issuing Retiree Payments to Rollover Institutions 14

Elements and Element Templates 14

Predefined Tax Elements 16

Secondary Element Classifications 17

Wage Basis Rules 17

Process Configuration Group 18

Retiree Record Management 18

Transitioning an Employee to a Retiree 20

Issuing Pension Funds to Other Payees 21

IMPLEMENTATION AND USE

Maintaining Retiree Person Information 23

Maintaining Person Information 23

Maintaining Employment Information 23

Adding a Second Assignment 23

Managing Retirees Living Abroad 24

Managing Retirees Living in States that Do Not Tax Pension Payments 24

Taxation Within Oracle Fusion HCM 24

Retiree Tax Withholding for Pension and Annuity Payments Card 24

Setting Up Automatic Card Creation 25

Creating the Card Manually 25

Creating the Card Through the HCM Spreadsheet Data Loader 25

Adding a Second TRU Association for a Second Assignment 27

Exempting Retirees from Taxes and Wage Accumulation 28

Calculation Cards for Retirees 30

Reporting Information Card 30

How Retiree Calculation Cards Work Together 31

IMPLEMENTATION AND USE

Assigning Salary Information to a Retiree for Periodic Pension Payments 31

Assigning a Payroll to a Retiree 31

Assigning a Payroll to the Retiree 31

Transferring a Retiree to a New Payroll 32

Assigning Payment Methods to the Retiree 32

Processing International ACH Transfers 32

Additional Set Up Reference Material 33

User Interface Configuration 33

Predefined Payslip Template Configuration 33

Check Template Configuration for the MICR Codes 34

Appendix A: Worked Examples 34

On-Boarding a Retiree Eligible for Multiple Distribution Types 34

Elements and Salary Basis Configuration 35

On-Boarding the Retiree 38

Setting Up an Estate for a Deceased Retiree 41