Contribution Allocation - Current Your employer sends to PERS NDPERS 15.26% distributes of your gross earnings each pay period into these (does not include overtime) accounts 7.12% 1.14% 7% Employer Account Retiree Health Credit Employee Account (General Pool of Funds ) (Your Member 3 Account Balance) 9
Contribution Allocation – Effective for New Hires 01/01/2020 Your employer sends to PERS NDPERS 15.26% distributes of your gross earnings each pay period into these (does not include overtime) accounts 8.26% 7% Employer Account Employee Account (General Pool of Funds ) (Your Member 4 Account Balance) 0
Service Credit and Vesting • You receive one month of service credit for each month NDPERS receives contributions on your behalf. • Vested means you are legally entitled to a monthly benefit from NDPERS. • You become vested the earlier of: • Achieving 36 months of service credit, or • Attaining 65 years of age while employed • This is an ANNUITY. . . You can receive a monthly retirement 41 payment for the rest of your life.
Dual Membership (Combine service credit for vesting and normal retirement) • NDPERS Defined Benefit Retirement Plans: • Defined Benefit Hybrid Plan (Main) • Public Safety Plan • Judges Plan • Highway Patrol Plan • Other Qualifying State-Sponsored Retirement Plans • Teachers Fund for Retirement (TFFR) • Teachers Insurance and Annuity Association (TIAA) (through North Dakota University System only) 42
DB Retirement (hired before Jan 1, 2016) Early Retirement** Normal Retirement Lifetime benefit Lifetime benefit • • Reduced by 6% for each year or At the earlier of: .005 for each month if: Attain Age 65 NOT Age 65 OR OR Achieve Rule of 85 HAVE NOT met Rule of 85 Member’s Age + Service Credit Example: 55 years + 30 years of service = 85 **Must be at least age 55 43
DB Retirement (hired on or after Jan 1, 2016) Early Retirement** Normal Retirement Lifetime benefit Lifetime benefit • • Reduced by 8% for each year or At the earlier of: .667 for each month if: Attain Age 65 NOT Age 65 OR OR Achieve Rule of 90 HAVE NOT met Rule of 90 (with minimum age of 60) Member’s Age + Service Credit Example: **Must be at least age 60 44 60 years + 30 years = 90
DB Retirement Benefit Formula - Current • Final average salary (FAS) • The average of your highest 36 salaries during the last 180 months worked • Benefit multiplier • 2.00% • Years of Service • One month of service for each contribution (FAS x 2.00% x YOS = Single Life) 45
DB Retirement Benefit Formula – Effective for New Hires January 1, 2020 • Final average salary (FAS) • The average of your last 36 salaries • Benefit multiplier • 1.75% • Years of Service • One month of service for each contribution (FAS x 1.75% x YOS = Single Life) 46
Benefit Options Single Life Joint & Survivor 50% Joint & Survivor 100% Twenty Year Term Certain Ten Year Term Certain Partial Lump Sum Option Graduated Benefit Option 47
EXAMPLE: RETIREMENT BENEFIT Age at Retirement: Member (Female) : 59.9 years Spouse (Male) 67.5 years 48 Disclaimer: This example may not be interpreted as a personal calculation
Disability Benefits in the DB Plan • Disability Retirement • Vested after 6 months • Must separate from employment • Determined by Medical Consultant or Social Security Award • 25% of Final Average Salary (FAS) • $100 per month minimum • Eligibility will be recertified 49
DB Survivor Benefits • Assumption: Member is not receiving a retirement benefit • Lump Sum Payment • Applies to single and non-vested members • Lifetime Payments – Surviving Spouse Only • 50% of Normal Single Life or • 100% Joint & Survivor Payment • If deceased was age 65 or met “Rule” 50 (at normal retirement)
Member Account Balance Options at Separation of Employment NOT Vested Vested Leave member account balance with Receive a lifetime annuity (retire as early as age NDPERS 55/60 (based upon hire date) Withdraw later or attaining “Rule”, or age 65, whichever is Return to service , accrued service and earlier). account balance are recognized Member account balance continues to Interest no longer accrues when you receive accrue interest at 7.25% currently retirement benefit. 7% effective Jan 1, 2018 Lump Sum Refund Lump Sum Refund Federal tax withholding Federal tax withholding ND state tax withholding ND state tax withholding IRS Penalty for early withdrawal IRS Penalty for early withdrawal Direct Rollover Direct Rollover Taxable & non-taxable monies Taxable & non-taxable monies Avoid tax & early withdrawal penalties Avoid tax & early withdrawal penalties 51 Combination rollover/refund Combination rollover/refund
Can I Invest MORE in My DB Plan? YES! Purchasing service may: 1.Vest you sooner 2.Increase your lifetime benefit 3.Increase your RHIC benefit 4.Get you to “Rule” sooner 52
Purchase of Service Credit Previous Employment: – Non-Covered ND Governmental Service – Out-of-State Governmental Service – Refunded NDPERS Service Federal Service Legislative Service Military Service (maximum of 48 months) Leave of Absence 5 Generic (maximum of 60 months) 3
Purchase Provisions • Cost of Purchase • Actuarial Calculation • Online (Member Self Service) • Request for Purchase SFN 53718 • Payment Methods • Direct Rollover/Transfer of Pre-Tax Dollars from other retirement plans • Payroll Deductions (pre or post-tax) 54 • Periodic Payments
Sick Leave Conversion Final Average Salary (FAS) X 15.26% (Contribution Rate) X Number of Months (hours divided by 173.3) =$Cost If your employer pays out a portion of your sick leave, can you still convert your sick leave balance for service purchase? Yes! 55 Note: sick leave conversion can only occur when a member separates from service.
Deferred Compensation Plan 56
What is Deferred Compensation? • Voluntary supplemental retirement plan • Investing Pre-tax dollars to lower your taxable income • Taxed at the time of distribution • Invest with Plan Provider you select • You select how your money is invested • Increase, decrease, suspend contributions at any time 57
Investing • NDPERS Companion Plan • Quick Enrollment (TIAA) • 9 eligible provider companies • Participate with multiple providers • Change providers or complete partial/full transfer of funds to another PERS 457 provider any time 58 • You select how your money is invested
Enrollment • Enroll, suspend, or change contributions any time • Complete SFN 3803 • Online Member Self Service (MSS) • Quick Enrollment • Compete SFN 54362 or select NDPERS Companion Plan online (MSS) • Administered by TIAA • Automatic $25/month 59
Annual Deferral Limits • Minimum • $25 per month • Maximum • The lesser of: • 2019 Annual IRS Limit: $19,000/year or • 100% of Taxable Compensation • “Other 457 plans” • Employer is responsible for tracking annual limits 60
Catch-up Provisions (2 options) 50+ Catch-Up • Additional $6,000 (total of $25,000) • Complete SFN 3803 3-Year Catch-Up • Up to $38,000 yearly • 3 consecutive calendar years prior to year of “normal” retirement • One time only – NDPERS approved • Complete SFN 51501 and 3803 61 Cannot be used at the same time
Deferred Lump Sum Contributions • Lump Sum Payments: • Unused annual leave • Unused sick leave • Back pay • Subject to FICA before deferral • Cannot exceed annual IRS limits • Severance pay or buyout distributions are not eligible to be deferred 62
Portability Enhancement Provision 63
What is PEP FREE MONEY !!!! Must participate in an eligible deferred compensation plan Allows you to vest in the employer Defined Benefit Hybrid contributions Not a match but a redistribution of funds Faster growth of member account balance and increased “portability” 64
Contribution Allocation with PEP - Current Years Your Investment of Service in Deferred 15.26% Comp of your gross earnings 0-12 1% of gross months pay (does not include overtime) or minimum of $25 13-24 2% months or minimum of $25 25-36 3% months or minimum 10% 11% 8% 9% 7% 7.12% 3.12% 6.12% 4.12% 5.12% 1.14% of $25 Retiree Health Insurance Credit (RHIC) Employee Employer 37 + 4% Account Account months or minimum 65 of $25 NDPERS distributes into these accounts
Contribution Allocation with PEP – Effective 1/01/2020 for New Hires Years Your Investment of Service in Deferred 15.26% Comp of your gross earnings 0-12 1% of gross months pay (does not include overtime) or minimum of $25 13-24 2% months or minimum of $25 25-36 3% months or minimum 11% 10% 8% 9% 7% 7.12% 4.26% 4.12% 5.12% 6.12% of $25 Employee Employer 37 + 4% Account Account months or minimum 66 of $25 NDPERS distributes into these accounts
How To Activate PEP If enrolled in an eligible deferred compensation plan, PEP is automatic If you’re not at the maximum, consider increasing your contribution If not enrolled, contact a Deferred Comp provider representative to enroll Qualifying “Other 457 / 403B” Plan 67
Retiree Health Insurance Credit 68
Retiree Health Credit • $5.00 for Every Year of Service Credit • Reduced for Early Retirement • Applies to any Health Insurance or Prescription Drug Plan Premium • Also applies toward NDPERS dental and NDPERS vision premiums • This benefit is eliminated for new hires effective January 1, 2020 69
Online Employer Services 70
NDPERS Website 71
Employer Services • Employer Resources • Employer Guide – wage reporting guidelines • Forms – authorized agent changes • Publications – kits, employer news • Join NDPERS Plans • New Group Information • Meeting Request 72
Employer Guide & Wage Reporting • Reported wages include member’s monthly gross base earnings • Exclusions: • Lump sum payouts • Overtime • Transportation expenses • Housing /wage differential allowances • Performance /Longevity Bonuses may be considered if annualized over period earned 73
Special Employment Arrangements • Full Time Contract / Written Agreement • Report all wages within contract • Exclude duties outside of contract (incidental) • Exclude Overtime Example: Deb works within school administrative staff • and works contracted 25 hours/week. She is also assisting as basketball coach and under a separate contract for10 hours/week. Reportable Wages? Full Time Contracted Wages • (Wages Earned on 25 Hours/Week) 74
Special Employment Arrangements No Contract / Written Agreement • Employee works in several capacities • Sum of hours meets eligibility guidelines • Exclude Overtime • • Example: Employee works in several capacities for the employer 20-40 hours each week. Reportable Wages? Sum of All Wages • (Excluding Overtime) 75
Special Employment Arrangements • Seasonal / Less than 12 month Employees • Example 1: Bus driver works for 9 months and receives payment for hours worked over a 9 month period Reportable Wages? Wages each month for 9 months • (Excluding Overtime) Enter LOA for summer months • Example 2: Bus driver works for 9 months and chose to have payment over 12 month period Reportable Wages? Wages each month for 12 months • Lump sum payment reported in May…not allowed. Must report wages over entire 12 month period earned (Excluding Overtime) 76
Notice of Employment Change • Employee Leave of Absence • Classification Change Within Agency • Permanent to Temporary • Reduction in Hours • Full-Time to Part-Time Status • Contributing to Non-Contributing • Important for NDPERS • Allocate funds correctly • Explain missing wages 77
Separation of Employment • Special Kits: • Retirement • Disability Retirement • Deferred Retirement • Notice of Transfer • Refund/Rollover • Location: Resources or Home Page 78
Deferred Retirement Kit (SFN 58044) • Employee is eligible for retirement but choosing to defer until later date • Employee will receive an AUTO REFUND of member account balance but is choosing to keep account at NDPERS • Less than $1,000 • Less than 3 years of service (not vested) 79
Notice of Transfer Kit (SFN 53706) • Transfer of employee benefits between participating employers • Notice of Transfer is employer notification form • Document unused sick leave balances • Employees transferring are not entitled to refund / rollover 80
Refund / Rollover Kit (SFN 53879) • Must terminate employment and be off covered payroll for at least 31 days • Processing takes approx. 60-90 days from last regular paycheck • Must have bona fide separation of employment (no indication you will return to NDPERS employment) • Employees returning to work with NDPERS employer within 60 days NOT eligible • Employee Forfeits: 81 • Service Credit • Retirement / Disability Benefit • Retiree Health Credit Benefit
Employees Returning To Work • Early Retirees • Must have retirement benefit suspended, if returning to eligible position • Normal Retirement (Age 65 or “Rule”) • May waive participation in retirement plan contingent upon RTW with new employer • Must contact NDPERS for eligibility • Termination of Participation (FT to PT status) • Must update employee record from “contributing” to “non-contributing” status 82
Employer Forms • Employer Payment Election • Authorization of Electronic Payment • Memo of Understanding • Temporary employee waivers • Maintain documentation 6 years • Appointment of Authorized Agent 83
Questions? 84
BREAK
LUNCH Lunch will be on your own
Political Subdivisions & non-PeopleSoft State Employers UNDERSTANDING PAYROLL REPORTING 87
Enhancing the Member Experience Member Self Service (MSS) Multi-Factor Authentication Helps protect member data and ensures accuracy of demographic information. Member must complete every 9 months. Online Replies through MSS NDPERS may respond to members through MSS after they submit a message (ticket) through MSS. Coming soon… Retirement Application Wizards Members will be able to apply for retirement online – including deferral/refunds/disability/normal. Portal Upgrade Transition to a mobile friendly and more efficient platform in Spring 88 2020.
Employer Self Service (ESS) Overview Organization Maintenance Regular tasks you should review • Add/terminate employees • Enroll in plans – have employees log into MSS and enroll • Leave of absence (LOA) – must be entered in ESS • Seasonal employees – update in ESS if an employee’s seasonality changes • Review and update authorized agents Payroll Headers Think of headers as NDPERS invoices . Your organization can’t pay before the invoice (header) is ready. o Posted status for retirement and insurance o Valid status for 457 Deferred Compensation & Purchases 89 Watch for adjustment reports.
Submit reports & payments to NDPERS Processing Payroll o Make sure your system rounds to 2 places. o Agree to pay NDPERS contribution total on manual reports. o Upload reports to pay your payroll amounts. Debit ACH Payments ( Mandatory effective 7/1/2019) o Ensures accuracy of your organization’s payroll. o Print remittance report for invoice backup on what is paid. 90
Comin ing so soon i in E ESS… Portal Upgrade Transition to a mobile friendly and more efficient platform in Spring 2020. 91
Reporting ELIGIBLE Retirement Contributions 92
Clarifying what is NOT considered Wages or Salary Fringe benefits such as, but not • Medical Insurance limited to: • Oil Patch Add-on • Overtime or Straight Overtime • Disability insurance premiums or (Straight time) benefits • Early Retirement Incentive pay • Salary received by employer in lieu of • Severance Pay previous employer-provided fringe • Shift Differential benefits, ex. health care. • Lump sum payouts of unused sick • Amounts contributed by the employer leave, personal leave, vacation or to a qualified Section 125 cafeteria annual leave plan (Flex Comp), 401K, 403B, 414(H) • Retention or Recruitment bonuses or 457 plan • Workforce Safety and Insurance • Housing allowance or Transportation 93 Benefits expenses
Monthly Retirement Reports Next Steps Your report should be in Posted status HIT the DEBIT ACH button to initiate payment overnight How to FIX report in Review? 1. Check your details to see if any are in Review. If so, click on Review to view Errors/Warnings and to analyze the employee’s information. 2. Review your Uploaded Totals for Wages or Contributions . Your total does not match NDPERS. 94
Most Common Reporting Errors 1. Reporting change or variance in salary amount 2. Contributions and wages are listed as zero 3. Contributions are reported for an LOA period 4. Trying to include an adjustment in the regular report 5. Employee’s information does not exist or is incorrect 6. Uploading the report more than once 7. Submitting a late report 95
How to report salary variances? What is a salary amount change or variance? The wages increased significantly from previous report. How to FIX it? Add a comment. 1. Explain in detail the reason for the increase in wages • What it is for, • When it should be applied and • How much to each reporting month? 2. Click SAVE, 3. Inform NDPERS to suppress the warning. Do not ignore the detail. 96 Ignoring DELETES the wages and contributions.
How come there is a zero? Contributions and wages must not be null or zero Wages or contributions were not received for the member or they are in the wrong reporting bucket. How to FIX it? Check your payroll records and contact NDPERS to correct. It’s true: Member has ZERO wages this month! 1. Add a comment explaining this. 2. SAVE the comment. 3. Click the Ignore button. 97 This is the only case where you would ignore a detail!
Any tips to report Leave of Absence (LOA)? Contributions are reported for an LOA period. Is the member still on LOA? YES! Add notes in the comment box explaining why there are wages. Has the member returned from the LOA? YES! • Enter the return date in ESS in the comment box. • NDPERS will update the records, suppress the warning, and post the detail. 98
How can I provide adjustments? Did your report already post? Any adjustments must be reported on an adjusting report. Examples of adjustments • Negative adjustments • Bonus/Retro wages • Missed wages Annualize Eligible 99 (spread over bonuses 12 months)
I did not receive an ESS error message Final Tip The wages posted without an error in the wrong month! • Create an adjusting report to correct the error OR • Contact NDPERS 100
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