Employer News | Quarterly Newsletter | Winter 2021

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Winter 2021 | Volume # 167

Employer Compliance Audits

The Division of Retirement and Benefits auditors perform retirement system compliance audits of participating employers. The audited retirement systems include the following:

  • Public Employees' Retirement System (PERS),
  • Teachers' Retirement System (TRS),
  • Alaska Supplemental Annuity Plan (SBS), and
  • Alaska Deferred Compensation Plan (DCP).

A participating employer may be in any combination of these four systems. The Division’s auditors perform compliance audits on all retirement systems with which the employer participates. Additionally, the Alaska State Social Security Administrator, Melanie Helmick, assists in educating the employer and employees to better understand the impacts of participating in the Social Security system and provides valuable information about applicable benefits, if any.

To minimize the spread of COVID-19, the Division’s auditors have not and will not travel to employer locations for some time. As a result, auditors will continue using a secure portal for transfer of audit information between the employer and the Division. We appreciate employers working with us as we continue to transition to remote audits until it is safe to travel and once again work face-to-face.

Thank you for all the work you do for retirement system members and thank you to participating employers for continuing to comply with our documents request. If you have any questions regarding employer audits and/or document requests, contact the Division’s audit unit toll-free at (800) 821-2251.

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IRS Employer Updates for 2021

2021 IRS Tax Calendars

IRS Publication 509, Tax Calendars, is now available for 2021 on the IRS.gov website. This publication is a valuable employer tool providing employer related IRS due dates by month and quarter.

Reporting Nonemployee Compensation

The IRS reminds employers that starting in tax year 2020, payers must complete the new Form 1099-NEC, Nonemployee Compensation, to report any payment of $600 or more to a payee.

Form 1099-NEC replaces Box 7, Nonemployee Compensation, of the 1099-MISC form. Now, nonemployee compensation paid by an employer is reported exclusively on 1099-NEC. The 1099-MISC form is still used to report at least $600 in rents, prizes and awards, other income payments, payment paid to an attorney, etc.

Generally, payers must file Form 1099-NEC by January 31, 2021. For 2020 tax returns, the due date is February 1, 2021. There is no automatic 30-day extension to file Form 1099-NEC, however, an extension to file may be available under certain hardship conditions.

Subscribe to the IRS Federal State Local Employment Tax (FLSET) News

The IRS FSLET office presents information on federal tax matters for all types of government entities.
Sign-up to receive information pertaining to:

  • Calendar of outreach events (conferences, seminars, etc.)
  • Compensation and fringe benefit issues
  • Information return reporting
  • News and reminders from the Social Security Administration
  • Activities of the National Conference of State Social Security Administrators
  • Recent tax law changes

Remember to Update Your IRS Publication 963

IRS Publication 963, the Federal-State Reference Guide, was updated July 2020. This cooperative publication (IRS, SSA, and National Conference of State Social Security Administrators) is a valuable resource for governmental employers (including Indian Tribal governments) by providing guidelines for Social Security and Medicare coverage and tax withholding requirements.


Public Employer's Toolkit

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Full Backouts

Employers, this serves as a reminder to please inform your Division payroll contact before performing a full back-out of an employee’s contribution. This is especially critical when it comes to the PERS DCR, TRS DCR, and SBS plans as market losses and fees can be incurred that can cause the account balance to be less than the back-out. Employers are responsible for all market losses or fees imposed by Empower for backing out ineligible contributions.

One way to prevent full backouts is to make sure the employee is hired into the correct plan, either Defined Benefit (DB) or Defined Contribution (DC).

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It’s a New Year—Time to Update Employer Contacts

It is important for all employers to keep their agency contact information up-to-date, this is how the Division can notify you of important information and/or changes. It also gives the Division permission to exchange information with your staff. If a staff member is not on the list, we cannot discuss important information with them.

Please ensure that the following contacts are up to date with correct name, email address, phone number, and address. The same individual may be used for more than one contact type.

  • Payroll Contact *REQUIRED
  • Administration Contact - can have more than one
  • Finance Director Contact *REQUIRED
  • Additional Contact(s) - you may have more than one
  • Personnel Contact (if applicable) *REQUIRED
  • Superintendent Contact (if applicable)
  • Data Processing Contact (if applicable)
  • Mayor Contact

Please work with your active payroll contact to verify all employer contacts are correct.

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eReporting User Name and Password Confidentiality

Your user name and password should always remain confidential to ensure the security of your payroll records.

Employer eReporting requires employers using the system to establish a user account for each employee who requires access to the system. If another employee will be assisting with payroll submissions when you are out of the office they must contact the Division of Retirement and Benefits to obtain their own unique user ID and password. You can be liable for any submissions made by an unauthorized user using your credentials.

In addition, when an employee no longer needs access to eReporting due to a promotion, transfer, or termination, a LogonID Request form needs to be submitted timely to delete their access. This form will be required for any new user, to delete a current user, and for any changes to a current user’s account.

In order to request a new user, delete a user or change a user’s access, please submit the employer services LogonID Request Form signed by your Employer Representative/Administrator. The form can be found on the Division’s website.

Remember, your password will expire every 90 days. Please notify your Retirement and Benefits active payroll contact if you need a password reset.

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2020 PERS and TRS CAFRs and Financial Statements Available Online

The 2020 Comprehensive Annual Financial Reports (CAFR) and Audited Financial Statements for the PERS and TRS are available online. To request hard copies, please email doa.drb.accountants@alaska.gov.

PERS Publications

TRS Publications

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IRS Pension Plan Limitations for Calendar Year 2021

The IRS has announced the 2021 calendar year pension plan limitations. The limitations that specifically apply to the pension contributions submitted to the Division include:

  • 401(a)(17) Compensation Limit
    For calendar year 2021, the compensation limit is increasing to $290,000. The compensation limit is the maximum amount of compensation that employee contributions are allowable. This limitation applies to the PERS, TRS, JRS, and EPORS. Employer contributions are still due to the Division if an employee’s compensation exceeds the limit.

  • 457 Deferred Compensation Limits
    For calendar year 2021, the DCP contribution limit remains $19,500. Participants are allowed to contribute an additional $6,500 in the year they turn age 50 or greater for an annual maximum of $26,000. This represents the annual allowable of $19,500, plus the additional $6,500. The catch-up maximum is $39,000. This represents double the annual maximum of $19,500.

SBS Limitation for Calendar Year 2021
The Social Security Administration has announced the calendar year 2021 base wage is increasing to $142,800. The SBS base wage mirrors the social security limits. If you have any questions regarding the IRS Pension Limitations—especially if you have an employee who appears will meet or exceed the limitations—please connect with your payroll contact.


Social Security Contribution Base

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DCR Plan—Submitting Beneficiary Designation
Forms to Empower Retirement

Defined Contribution Retirement (DCR) Plan beneficiary designation forms must be submitted directly to Empower Retirement (Empower), not to the Division of Retirement and Benefits (Division). The employee must wait until their first payroll has processed with the Division or until they have received their welcome flyer/postcard from Empower before setting up their beneficiary designations online or submitting a hard copy form. Empower will reject all forms until the employee has an account established with them.

Submitting beneficiary forms online is Empower’s preferred method. The employee should create an account with Empower at participant.empower-retirement.com. This is the most efficient process and helps reduce the chance of errors. If assistance is needed, Empower can be reached at (800) 232-0859.

If submitting the beneficiary designation online is not an option, please mail or fax the completed form to Empower. Hard copy beneficiary designation forms should not be submitted to Empower until 15 days after the employee’s first payroll has been submitted to the Division.

Empower Retirement
P.O. Box 173764
Denver, CO 80217-3764 
Empower Retirement
(303) 801-5800

Should the employee require a paper form, please contact Empower or your designated Division Active Payroll Contact for the most up-to-date form. A separate beneficiary designation form must be submitted for each plan (PERS DCR, TRS DCR, SBS-AP, and DCP) in which the employee is a member. Each plan has its own form with the plan number located in the upper right-hand corner of the form:

  • PERS DCR: 98214-04 
  • TRS DCR: 98214-05
  • SBS-AP: 98214-03 
  • DCP: 98214-01

Please note that all Defined Benefit (DB) beneficiary forms should continue to be submitted to the Division.

If you have any questions, please contact our office toll-free at (800) 821-2251 or email us at doa.drb.activepayroll@alaska.gov.

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