Post by TonyV on Feb 11, 2011 4:15:43 GMT -5
2010 Profit Sharing Q&As
Calculating the Total Hourly Profit Sharing Amount
Q1. What is the overall process for determining a profit share?
• Plan Profits and Sales are determined.
• Total Profit Share is then determined by a formula based on return on Plan Sales.
• Eligible Pay is determined for hourly employees.
• Profit Sharing Percentage Factor for hourly employees is determined by dividing the Allocated Profit Share by Eligible Pay.
• Each Employee’s Profit Share is determined by multiplying their Eligible Pay by the Profit Sharing Percentage Factor that which is applicable to eligible hourly employees.
Q2. How is the total profit sharing amount determined?
• Profit sharing is based on profits and sales of the Company’s U.S. auto-related operations.
• The formula pays out:
Pay This % of Profits For Profits As Percent of Sales
- 6% of Profits Up to 1.8% of sales, plus
- 8% Over 1.8% and up to 2.3%, plus
-10% Over 2.3% and up to 4.6%, plus
-14% Over 4.6% and up to 6.9%, plus
-17% Over 6.9% of sales.
Q3. Can you give an example of how the formula works in practice?
• Using hypothetical automotive-related numbers, assume:
- U.S. sales of $100 billion
- Total U.S. before-tax profits, as defined in the Plan, of $3.82 billion
(U.S. before-tax Plan Profits are 3.8% of U.S. sales)
• This is the way the total profit sharing amount would be calculated
- Total profit share is total of: (Mils.)
- 6% of U.S. profits up to 1.8% of
U.S. sales (in this example, $1,800 million) $ 108
- 8% of U.S. profits between 1.8% and 2.3% of
U.S. sales (in this example, between $1,800 and $2,300 million) 40
- 10% of U.S. profits between 2.3% and
4.6% of U.S. sales (in this example, between
$2,300 and $3,820 million) 152
- 14% of U.S. profits between 4.6% and
6.9% of U.S. sales (in this example, $0) 0
- 17% of U.S. profits over 6.9% of sales
(in this example, $0) 0
- Total $ 300
The Profit Sharing Percentage Factor
Q4. How is the factor calculated?
• The factor is the percentage that results from dividing the Allocated Profit Share by the total Eligible Pay
• Continuing with the previous example, if the profit share allocated to hourly employees was $300 million and eligible pay of all eligible hourly employees was $5,700 million, the percentage factor would be:
Allocated Profit Share = $300 x 100 = 5.26316%
Eligible Pay $5,700
Q5. What is the percentage factor for the 2010 plan year?
• The 2010 factor is tentatively scheduled to be announced on February 25, 2010.
Eligibility
Q6. Which U.S. employees get Profit Sharing?
• Generally, full-time hourly employees and temporary hourly employees working a full-time schedule at U.S. operations (Ford Direct and Ford Leased) hired before January 1, 2011, will participate in Profit Sharing -- with the exceptions of:
Employees who break service anytime during the year prior to January 1, 2011, for any reason other than death, layoff, retirement or sale of an operation
Employees Who Change Status
Q7. Will an employee who transfers during a plan year into an eligible operation or changes employment status receive a profit share?
• If an employee meets all the eligibility requirements after transfer to an eligible operation or changes employment status (Hourly to Salaried / Salaried to Hourly) during the plan year, the employee will be eligible to participate based on eligible pay affected by the transfer.
• Example of becoming eligible during the plan year: an employee changing status from Salaried to Hourly on April 1, 2010:
The employee participates in profit sharing from April 1 through year-end 2010. Eligible pay earned during this nine-month period would be used to determine the individual’s profit sharing amount.
Determining Each Eligible Employee’s Share
Q8. What differences may be reflected on either the Form W-2 or year-to-date gross earnings on the year-end pay stub that are not eligible for profit sharing purposes?
A profit sharing report, detailing hourly employees' eligibility and eligible/ineligible wages, will be available February 22, 2011, in the INFOPAC reporting tool to help payroll coordinators resolve differences. Report name is PROFDET and access is limited by location. If you require access, please go to the Employee Payments website at dept.sp.ford.com/sites/employeepayments/Pages/Default.aspx and click on INFOPAC in the FORMS section to request access. You will need to specify the payroll location(s) that you need access to and be authorized by an LL6 or above (supervisor/manager).
Q9. How is pay received in 2011, but earned in 2010 treated?
• If the date of the paycheck is in 2010, the related eligible pay is included in 2010 eligible pay.
• If the pay is earned in 2010, but paid in 2011, it is excluded from the 2010 profit sharing calculation.
• For hourly employees, 2010 eligible earnings include the pay endings January 3, 2010, through December 26, 2010.
Deductions from Profit Sharing Checks
Q10. What is deducted from profit sharing checks?
Elections contributed to TESPHE, Pre-Tax Contributions, are not subject to Federal income taxes. Social Security taxes, applicable state and local taxes, bankruptcy, garnishments, federal and state levies, and union dues (if applicable) will be deducted. TESPHE elections for the Profit Sharing payout will be suspended if there are outstanding Child Support Arrearages.
• Elections to be paid by check/direct deposit, or deposited to Ford Interest Advantage (FIA) Account, deductions will be taken as follows:
Federal income taxes - 25%
Social security taxes - 5.65%
State and local taxes
Child Support Arrearages Outstanding Income Withholding Orders
Bankruptcy payments
Garnishments wage deduction orders
Federal or state levies
Union dues
• Deductions are taken from the portion of the Profit Sharing paid by check or deposited in FIA, and any uncollectible taxes and/or union dues will be deducted from the next regular paycheck(s) to the extent necessary to collect amounts due. This could result in net $0 for future pay checks after profit sharing payouts due to elections.
• Employees who elect FIA and do not have an active payroll deduction account by January 21, 2011, will be ineligible to elect this option.
Deduction Type Summary:
TESPHE FIA CHECK
Federal Income Taxes No Yes Yes
Social Security Taxes Yes Yes Yes
State and Local Taxes * Yes Yes
Child Support Arrearage ** Yes Yes
Federal and/or State Levies Yes Yes Yes
Bankruptcy Yes Yes Yes
Garnishment Wage Order Yes Yes Yes
Union Dues Yes Yes Yes
*Varies per state and local governances. Contact your local and state tax authorities for guidance.
** If the employee is subject to Child Support ,TESPHE election will be cancelled.
Q11. How are union dues calculated?
• Payroll first calculates “eligible union wages” which are straight-time hourly base wages (first 40 hours per week), holiday pay, vacation pay, associated cost-of-living allowance, bereavement and jury duty.
• “Eligible union wages” are multiplied by the profit sharing factor then multiplied by the union dues factor of 1.15%.
Eligible Pay for Hourly Employees
Q12. What types of hourly pay count towards eligible pay for profit sharing?
ELIGIBLE PAY INCLUDES:
Straight-time hourly base wages (for straight-time hours and overtime hours) before wage reduction under the Tax-Efficient Savings Plan for Hourly Employees
Straight-time cost-of-living allowance (for straight-time hours and overtime hours)
Straight-time shift premiums (for straight-time hours and overtime hours)
Vacation and excused absence allowance
Apprentice training incentive payments
Seven-day operation bonus
Bereavement pay
Jury duty pay
Short-term military duty pay
Call-in pay
Certain grievance awards
Christmas bonus
Holiday pay
Eligible employees are given eligible pay credit for periods of local union leave or medical leave while receiving workers’ compensation (provided they work at least one full week in the calendar year and all other contract conditions are met), and scheduled hours missed during a Gradual Return to Work Program
ELIGIBLE PAY DOES NOT INCLUDE:
Overtime, Saturday, Sunday and holiday premium payments in excess of the
straight-time hourly rate
CIRS/Suggestion Awards
Taxable income for group life insurance over $50,000
Prior year’s profit sharing payment (if any)
Short work week payments
Supplemental Unemployment Benefit payments
Incentive Pay
Tool Allowances
Moving Allowance
Lump-sum separation or transfer incentive payments
Contributions to TESPHE
Q13. When are Profit Sharing contributions credited to TESPHE and FIA accounts?
As soon as possible, usually within two business days after Profit Sharing Day.
Q14. Why wasn’t all of my Profit Sharing deposited to my TESPHE account even though my confirmation shows I elected 100% TESPHE?
TESPHE contributions (including any portion of your Profit Sharing payment) cannot exceed certain regulatory limitations:
Pre-tax TESPHE contributions totaling $16,500 for the 2010 Tax Year
• Total contributions) cannot exceed a certain amount per pay period on a cumulative basis ($49,000 during the TESPHE limitation year, April 1 through March 31).
• These pay-period limits are calculated automatically and take into the account the amount you have contributed at the point your Profit Sharing payment is made during the TESPHE limitation year.
• Also, as noted above, any TESPHE Profit Sharing payment option election will be cancelled if you have child support arrearages.
Miscellaneous
Q15. Will Profit Sharing checks be direct deposited?
Yes, Profit Sharing payments will follow the distribution process of regular paychecks.
Q16. Who should I contact if I believe that I am eligible for Profit Sharing but do not receive payment?
Please contact your local human resources activity or /payroll coordinator.
Calculating the Total Hourly Profit Sharing Amount
Q1. What is the overall process for determining a profit share?
• Plan Profits and Sales are determined.
• Total Profit Share is then determined by a formula based on return on Plan Sales.
• Eligible Pay is determined for hourly employees.
• Profit Sharing Percentage Factor for hourly employees is determined by dividing the Allocated Profit Share by Eligible Pay.
• Each Employee’s Profit Share is determined by multiplying their Eligible Pay by the Profit Sharing Percentage Factor that which is applicable to eligible hourly employees.
Q2. How is the total profit sharing amount determined?
• Profit sharing is based on profits and sales of the Company’s U.S. auto-related operations.
• The formula pays out:
Pay This % of Profits For Profits As Percent of Sales
- 6% of Profits Up to 1.8% of sales, plus
- 8% Over 1.8% and up to 2.3%, plus
-10% Over 2.3% and up to 4.6%, plus
-14% Over 4.6% and up to 6.9%, plus
-17% Over 6.9% of sales.
Q3. Can you give an example of how the formula works in practice?
• Using hypothetical automotive-related numbers, assume:
- U.S. sales of $100 billion
- Total U.S. before-tax profits, as defined in the Plan, of $3.82 billion
(U.S. before-tax Plan Profits are 3.8% of U.S. sales)
• This is the way the total profit sharing amount would be calculated
- Total profit share is total of: (Mils.)
- 6% of U.S. profits up to 1.8% of
U.S. sales (in this example, $1,800 million) $ 108
- 8% of U.S. profits between 1.8% and 2.3% of
U.S. sales (in this example, between $1,800 and $2,300 million) 40
- 10% of U.S. profits between 2.3% and
4.6% of U.S. sales (in this example, between
$2,300 and $3,820 million) 152
- 14% of U.S. profits between 4.6% and
6.9% of U.S. sales (in this example, $0) 0
- 17% of U.S. profits over 6.9% of sales
(in this example, $0) 0
- Total $ 300
The Profit Sharing Percentage Factor
Q4. How is the factor calculated?
• The factor is the percentage that results from dividing the Allocated Profit Share by the total Eligible Pay
• Continuing with the previous example, if the profit share allocated to hourly employees was $300 million and eligible pay of all eligible hourly employees was $5,700 million, the percentage factor would be:
Allocated Profit Share = $300 x 100 = 5.26316%
Eligible Pay $5,700
Q5. What is the percentage factor for the 2010 plan year?
• The 2010 factor is tentatively scheduled to be announced on February 25, 2010.
Eligibility
Q6. Which U.S. employees get Profit Sharing?
• Generally, full-time hourly employees and temporary hourly employees working a full-time schedule at U.S. operations (Ford Direct and Ford Leased) hired before January 1, 2011, will participate in Profit Sharing -- with the exceptions of:
Employees who break service anytime during the year prior to January 1, 2011, for any reason other than death, layoff, retirement or sale of an operation
Employees Who Change Status
Q7. Will an employee who transfers during a plan year into an eligible operation or changes employment status receive a profit share?
• If an employee meets all the eligibility requirements after transfer to an eligible operation or changes employment status (Hourly to Salaried / Salaried to Hourly) during the plan year, the employee will be eligible to participate based on eligible pay affected by the transfer.
• Example of becoming eligible during the plan year: an employee changing status from Salaried to Hourly on April 1, 2010:
The employee participates in profit sharing from April 1 through year-end 2010. Eligible pay earned during this nine-month period would be used to determine the individual’s profit sharing amount.
Determining Each Eligible Employee’s Share
Q8. What differences may be reflected on either the Form W-2 or year-to-date gross earnings on the year-end pay stub that are not eligible for profit sharing purposes?
A profit sharing report, detailing hourly employees' eligibility and eligible/ineligible wages, will be available February 22, 2011, in the INFOPAC reporting tool to help payroll coordinators resolve differences. Report name is PROFDET and access is limited by location. If you require access, please go to the Employee Payments website at dept.sp.ford.com/sites/employeepayments/Pages/Default.aspx and click on INFOPAC in the FORMS section to request access. You will need to specify the payroll location(s) that you need access to and be authorized by an LL6 or above (supervisor/manager).
Q9. How is pay received in 2011, but earned in 2010 treated?
• If the date of the paycheck is in 2010, the related eligible pay is included in 2010 eligible pay.
• If the pay is earned in 2010, but paid in 2011, it is excluded from the 2010 profit sharing calculation.
• For hourly employees, 2010 eligible earnings include the pay endings January 3, 2010, through December 26, 2010.
Deductions from Profit Sharing Checks
Q10. What is deducted from profit sharing checks?
Elections contributed to TESPHE, Pre-Tax Contributions, are not subject to Federal income taxes. Social Security taxes, applicable state and local taxes, bankruptcy, garnishments, federal and state levies, and union dues (if applicable) will be deducted. TESPHE elections for the Profit Sharing payout will be suspended if there are outstanding Child Support Arrearages.
• Elections to be paid by check/direct deposit, or deposited to Ford Interest Advantage (FIA) Account, deductions will be taken as follows:
Federal income taxes - 25%
Social security taxes - 5.65%
State and local taxes
Child Support Arrearages Outstanding Income Withholding Orders
Bankruptcy payments
Garnishments wage deduction orders
Federal or state levies
Union dues
• Deductions are taken from the portion of the Profit Sharing paid by check or deposited in FIA, and any uncollectible taxes and/or union dues will be deducted from the next regular paycheck(s) to the extent necessary to collect amounts due. This could result in net $0 for future pay checks after profit sharing payouts due to elections.
• Employees who elect FIA and do not have an active payroll deduction account by January 21, 2011, will be ineligible to elect this option.
Deduction Type Summary:
TESPHE FIA CHECK
Federal Income Taxes No Yes Yes
Social Security Taxes Yes Yes Yes
State and Local Taxes * Yes Yes
Child Support Arrearage ** Yes Yes
Federal and/or State Levies Yes Yes Yes
Bankruptcy Yes Yes Yes
Garnishment Wage Order Yes Yes Yes
Union Dues Yes Yes Yes
*Varies per state and local governances. Contact your local and state tax authorities for guidance.
** If the employee is subject to Child Support ,TESPHE election will be cancelled.
Q11. How are union dues calculated?
• Payroll first calculates “eligible union wages” which are straight-time hourly base wages (first 40 hours per week), holiday pay, vacation pay, associated cost-of-living allowance, bereavement and jury duty.
• “Eligible union wages” are multiplied by the profit sharing factor then multiplied by the union dues factor of 1.15%.
Eligible Pay for Hourly Employees
Q12. What types of hourly pay count towards eligible pay for profit sharing?
ELIGIBLE PAY INCLUDES:
Straight-time hourly base wages (for straight-time hours and overtime hours) before wage reduction under the Tax-Efficient Savings Plan for Hourly Employees
Straight-time cost-of-living allowance (for straight-time hours and overtime hours)
Straight-time shift premiums (for straight-time hours and overtime hours)
Vacation and excused absence allowance
Apprentice training incentive payments
Seven-day operation bonus
Bereavement pay
Jury duty pay
Short-term military duty pay
Call-in pay
Certain grievance awards
Christmas bonus
Holiday pay
Eligible employees are given eligible pay credit for periods of local union leave or medical leave while receiving workers’ compensation (provided they work at least one full week in the calendar year and all other contract conditions are met), and scheduled hours missed during a Gradual Return to Work Program
ELIGIBLE PAY DOES NOT INCLUDE:
Overtime, Saturday, Sunday and holiday premium payments in excess of the
straight-time hourly rate
CIRS/Suggestion Awards
Taxable income for group life insurance over $50,000
Prior year’s profit sharing payment (if any)
Short work week payments
Supplemental Unemployment Benefit payments
Incentive Pay
Tool Allowances
Moving Allowance
Lump-sum separation or transfer incentive payments
Contributions to TESPHE
Q13. When are Profit Sharing contributions credited to TESPHE and FIA accounts?
As soon as possible, usually within two business days after Profit Sharing Day.
Q14. Why wasn’t all of my Profit Sharing deposited to my TESPHE account even though my confirmation shows I elected 100% TESPHE?
TESPHE contributions (including any portion of your Profit Sharing payment) cannot exceed certain regulatory limitations:
Pre-tax TESPHE contributions totaling $16,500 for the 2010 Tax Year
• Total contributions) cannot exceed a certain amount per pay period on a cumulative basis ($49,000 during the TESPHE limitation year, April 1 through March 31).
• These pay-period limits are calculated automatically and take into the account the amount you have contributed at the point your Profit Sharing payment is made during the TESPHE limitation year.
• Also, as noted above, any TESPHE Profit Sharing payment option election will be cancelled if you have child support arrearages.
Miscellaneous
Q15. Will Profit Sharing checks be direct deposited?
Yes, Profit Sharing payments will follow the distribution process of regular paychecks.
Q16. Who should I contact if I believe that I am eligible for Profit Sharing but do not receive payment?
Please contact your local human resources activity or /payroll coordinator.
