Employer News | Quarterly Newsletter | Fall 2022

• BEARS Employer Reporting Tool | Survey
• Entering Termination Dates
• Payroll Submissions—Remember To Send in Signed Summary Sheets
• Hiring a New Employee
• OOPS—I Submitted Defined Contribution Retirement Plan Member Contributions Incorrectly
• Why Do We Audit Political Subdivisions in the State of Alaska?
• At Home or On the Go? Social Security is Online
• Full-time, Part-time, or Seasonal Position

BEARS (Benefits and Retirement System) Employer Reporting Tool | Survey

The Division of Retirement and Benefits is working on a major project to modernize its data system and improve the administration of pension and insurance benefits for its members and participating employers. This system, known as BEARS (Benefits and Retirement System) will feature secure, timely, accurate, and consistent data, allowing the Division to provide enhanced customer service to its members, including self-service tools to accommodate on-demand requests.

Part of the BEARS project is the development of an improved Employer Services Portal. This portal will support consistent processes, enhanced accuracy, and security for our participating employers. The effect of these updated features will be increased efficiency in work management for both Division staff and you, the employer. We anticipate some initial testing of the new BEARS employer reporting functionality in early Spring 2023 and full testing in advance of an anticipated go-live in Spring 2024. Prior to go-live, the Division will support employers with instruction and training in using the new BEARS features. We will provide regular updates about the progress of the BEARS project, including training sessions, in future issues of Employer News and other communications. The attached survey will help the Division design future training and employer support to assist with the payroll reporting transition from eReporting to BEARS.

If you have any questions regarding the BEARS implementation and the new Employer Services Portal, please contact the Division through the dedicated email set up for that purpose: DRB.BEARS.Communication@alaska.gov.

Entering Termination Dates

When an employee terminates his or her employment, remember to submit termination (term) dates for each plan in which an employee is enrolled. Each plan is independent of one another and a termination date submitted in one plan does not post a term date in another plan.

For example, if an employee is in both PERS and SBS, a TERM date must be submitted for the member with both the SBS payroll and the PERS payroll.

Employees must have a term date before they can refund their retirement accounts. If no termination date is found, the member can expect a delay in receiving their refund. Timely submission of termination dates allows employees to refund their accounts timely and also reduce the number of inquiries made to you, the employer, to check the status of a member.

Payroll Submissions—Remember To Send in Signed Summary Sheets

For payrolls that are submitted using ACH, signed payroll summary sheets and ACH memos (if applicable) must be sent to doa.drb.employerpayroll@alaska.gov at the time payment is submitted.

If remitting payment by check, please make sure to include the signed summary sheet with your check. This will ensure contributions are posted without delay since we will not need to determine to which payroll the check should be attributed. 

Are You Still Paying Employer Payroll by Check? Electronic Payment is Preferred

In order to ensure timely and continuous payroll processing, you are encouraged to submit payments electronically. Please see the two payment options below:

1. eReporting ACH with Bank Account Activation (preferred method)
   • Go to eReporting
   • Open the Banking Tab
   • Set-up EFT
   • Bank account will be PENDING until your financial institution finalizes approval
   • Once ACTIVE, you can submit payment with ACH
   • Payment is submitted with payroll, and only the Signed Summary report is needed for processing.
     
     
2. eReporting Other ACH with no Bank Account Activation
   • No activation is required in eReporting
   • Submit payment with Other ACH
   • Signed Summary along with an ACH Memo is required to be sent in together for processing.

If you are interested in setting up an ACH payment, please reach out to your payroll contact for more information.

Hiring a New Employee

It is easy to transpose numbers when entering data. Make sure to verify all personnel data before submitting.

Entering the Correct Social Security Number (SSN) and Legal Name is Critical!

The Division relies on employers to properly report names and Social Security numbers. A member’s account is driven by the SSN. Each SSN submitted creates a separate account for the member. If two accounts are created for an individual member, it requires an SSN merge to correct member contributions.

Although not required for verifying an employee’s identification, it is highly recommended that employers maintain a copy of an employee’s Social Security card. An employee's name and Social Security number must match against the Social Security Administrations database. This is especially relevant to employees who have an account with Empower, since Empower requests a copy of a member’s Social Security card if there are discrepancies in an employee’s Taxpayer Identification Number (TIN). Empower checks an employee’s TIN, furnished by the employer, against the name/TIN combination contained in the Internal Revenue Service database. Empower places a fraud alert on a member’s account when an SSN discrepancy is discovered, and the member will not be able to refund their account until an SSN verification is provided to Empower.

If you have any questions regarding correcting a name and/or Social Security number, please connect with your payroll contact.

Make Sure Employees Are Hired in the Correct Plan

An SSN merge may also be required when a member is hired into the incorrect plan. It is critical for employers to verify that a new employee is enrolled in the correct plan. Typically, all employees hired after June 30, 2006, are to be enrolled in the Defined Contribution Plan (DC) Plan. However, if an employee was previously a Defined Benefit (DB) member with a previous employer, or with the same employer, and they have not refunded their account, they are eligible to be rehired in the DB plan. Contributions will have to be backed out for members enrolled in the wrong plan.

OOPS—I Submitted Defined Contribution Retirement Plan Member Contributions Incorrectly

There are times when an employer will need to back out ineligible contributions that were submitted to the Division of Retirement and Benefits. When this happens, there are a couple of things you should be aware of pertaining to backing out contributions from the Defined Contribution Retirement Plan (DCR).

Reasons for DCR Backouts

• A member is enrolled in the DCR plan when they are eligible for the Defined Benefit Plan (DB)
• The incorrect SSN was submitted, which created a separate account for the member
• Ineligible contributions (concurrent service, ineligible wages)

Employer Responsibility

Per statute, if a DCR member’s contributions must be backed from Empower Retirement for PERS, TRS, SBS, or DCP, the employer is responsible for all Empower Retirement fees and market losses associated with the ineligible contributions. If the member does not have enough funds in his/her account to cover the contributions being backed out, the shortage will be added to the employer’s over/short account as an amount owed by the employer related to the full-back out.

Relevant Statutes

PERS Sec. 39.35.770. Transmittal of Contributions; Claims Against Funds of an Employer, and (c) Employers are responsible for administrative fees, investment fees, and investment losses charged to accounts established under AS 39.35.730 resulting from contribution adjustments due to employers enrolling members in the plan before the members are eligible for membership. Contributions made by employees shall be returned to the employer by reducing future employee contributions due. Contributions, net of fees, and investment losses, made by employers shall be used to reduce future employer contributions due.

TRS Sec. 14.25.370. Transmittal of Contributions; Claims Against Funds of an Employer (c) An employer is responsible for administrative fees, investment fees, and investment losses charged to accounts established under AS 14.25.340 resulting from contribution adjustments because the employer enrolled a member in the plan before the member was eligible for membership. Contributions made by an employee shall be returned to the employer by reducing future employee contributions due. Contributions, net of fees, and investment losses, made by an employer shall be used to reduce future employer contributions due.

Why Do We Audit Political Subdivisions in the State of Alaska?

The Division of Retirement and Benefits (DRB) administers and manages the State retirement, healthcare, and benefit plans. As provided in the Alaska Statutes, the duties of DRB include managing the plans, reporting plan status, and recommending policy.

To manage the plans, report plan status, and recommend policy in accordance with State of Alaska Statute 39.30.340, DRB auditors routinely perform retirement system compliance audits of State of Alaska political subdivisions (employers). A political subdivision is a separate legal entity of the State with specific governmental functions. Political subdivisions include cities, towns, boroughs, villages, school districts, housing authorities, municipal corporations, hospitals, etc.

The purpose of the routine audit is to confirm that the employers are compliant with the State of Alaska PERS and TRS statutes, SBS and DCP plan documents, and internal revenue codes. DRB auditors perform compliance audits of the political subdivisions in the State of Alaska in accordance with the following Alaska Statutes:

• AS 39.35 Public Employees' Retirement System (PERS)
• AS 14.25 Teachers' Retirement System (TRS)
• AS 39.30.150 Supplemental Annuity Plan (SBS)
• AS 39.45.020 Public Employees Deferred Compensation Program (DCP)

At Home or On the Go? Social Security is Online

The Division of Retirement and Benefits is here to help your employees when they retire, if they become disabled, or if someone they depend on dies. Your employees can access their information, benefits, and important services online from just about anywhere with their personal my Social Security account.

With a my Social Security account, your employees can:

• View, download, and print their statement
• Compare future benefit estimates for different dates or ages when they may want to begin receiving benefits
• Check the status of their benefits application or appeal
• Review their earnings history
• Request a replacement Social Security card (in most states)

If your employees already receive benefits, they can:

• Get a benefit verification or proof of income letter
• Set up or change their direct deposit
• Change their address
• Request a replacement Medicare card
• Get a Social Security 1099 form (SSA-1099)
• Request a replacement Social Security card (in most states)

It’s easy to sign up for a my Social Security account. Please let your employees know that they can create their own my Social Security account today at ssa.gov/myaccount.

Full-time, Part-time, or Seasonal Position

Are your employees full-time, part-time, or seasonal? These positions may be dependent on the definition of full-time and part-time employment in terms of scheduled hours of work per week. Likewise, a seasonal position may be per season or a calendar year of scheduled employment.

Most employers, including political subdivisions, set a specific number of hours of work per week for full-time, and part-time employees, and per season for seasonal employees, for the purpose of employee benefits. As a reminder, political subdivisions in the State of Alaska are required to adhere by the definitions of full-time, part-time, and seasonal positions as defined by the Alaska Statutes (AS) 39.35.680 (32)(33)(40) for Public Employees' Retirement System (PERS) enrollments unless excluded by an individual employer.

AS 39.35.680 (32)(33)(40)

(32) "Permanent full-time" means an employee who is occupying a permanent position that regularly requires working 30 or more hours a week.

(33) "Permanent part-time" means an employee who is occupying a permanent position that regularly requires working at least 15 hours but less than 30 hours a week.

(40) “Seasonal” refers to an employee who is occupying a position for less than 12 months each year where it is anticipated that the same employee will return to the position when needed and includes a temporary employee of the legislature if part of the service for the legislature during each calendar year is performed during a legislative session.

For the purpose of PERS enrollment, political subdivisions that have employees in the above-listed categories should adhere to a definition of AS 39.35.680 (32)(33)(40) to avoid denying employees retirement benefits that they are perhaps eligible to participate in.