Employer News | Quarterly Newsletter | Spring 2023

• BEARS Project Update
• Employer On-Behalf Funding
• Fiscal Year 2024 Employer Contribution Rates Available
• Still Paying Employer Payroll by Check? Electronic Payment Preferred
• Annual Census Audits
• Pay Period End Dates—Consistency is Key to Ensuring Correct Reporting
• TRS 2022/2023 Year-End Reporting
• True-Up—Reminder to Review True-Up Records with Each Payroll Submission
• State and Local Government Employees in Positions Not Covered by Social Security

BEARS Project Update

The Division of Retirement and Benefits (Division) continues to progress with the development of the new BEnefits And Retirement System (BEARS), and we are looking forward to implementing the system in 2024. While there will be necessary changes for employers in how payroll files will be delivered to the Division, rest assured that we are developing procedures and training to make the transition as painless as possible. We will begin limited testing with select employers in Fall 2023 and will be providing more information to all employers as we get further along in the process.

If your organization would like to be engaged in the testing process or if you have questions, please reach out to us at DRB.BEARS.Communication@alaska.gov.

Employer On-Behalf Funding

Fiscal Year 2023

The Fiscal Year 2023 (FY23) Public Employees’ Retirement System (PERS) and Teachers’ Retirement System (TRS) employer on-behalf funding was provided in House Bill (HB) 281 (Section 80). The PERS on-behalf funding was modified, and the final details can be found on the Vetoes and Reduction page, Section 80.

The Division of Retirement and Benefits will apply FY23 PERS and TRS employer on-behalf to complete payrolls received in our office by July 15, 2023. FY23 covers payrolls containing payroll end dates from July 1, 2022, to June 30, 2023.

A complete payroll is defined as a payroll that has all elements needed to process the payroll. This includes the receipt of the funds in the State of Alaska’s bank account by July 15, along with the required and correct memo if the payment is a wire or push ACH. Additionally, a complete payroll includes a signed payroll summary and the necessary employer payroll detail needed to process the payroll.

After the July 15, 2023 cutoff has been reached and all applicable payrolls have been processed, the Division will complete the annual on-behalf funding true-up. We anticipate sending employer on-behalf year-end statements that include the true-up by mid-August 2023 via email.

Fiscal Year 2024 Employer Contribution Rates Available

The Alaska Retirement Management Board (ARMB) has established Fiscal Year 2024 (FY24) employer contribution rates for the PERS and TRS Defined Benefit (DB) and Defined Contribution Retirement (DCR) Plans.

The FY24 rates can be found on the Employer Contribution Rates webpage. You can also find this page by hovering over the “Employer” tab at the top of the page and clicking “Contribution Rates”.

For questions about employer contribution rates, please contact Christina Maiquis at (907) 465-1845 or via email at Christina.Maiquis@alaska.gov.

Still Paying Employer Payroll by Check? Electronic Payment Preferred

The Division encourages employers to switch over to ACH for faster processing. There are two payment options:

1. eReporting ACH with Bank Account Activation (preferred method)
   • Go to eReporting
   • Open the Banking Tab
   • Set-up EFT
   • The 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 have questions related to the conversion to electronic payment, please reach out to your payroll contact.

Annual Census Audits

The Division’s auditors KPMG are gearing up for census audits. Census audit selection is based on the employer size and can occur every year, every five years, or every ten years. The Division’s external auditor chooses employers for a census audit around July of each year. Employers will receive a notification that they have been selected and can expect to provide PERS- and TRS-related data to the external auditors within a specific time frame.

To aid employers in preparation for this process, it is important to keep detailed records of their transmissions to the Division and to ensure those transmissions reconcile to the employer payroll records. If you have questions related to the transmission records, please reach out to your payroll contact.

Pay Period End Dates
Consistency is Key to Ensuring Correct Reporting

Accurate reporting of Pay Period End (PPE) dates and the associated issue date is critical for ensuring salaries are assigned to the correct calendar year, determining eligibility for voluntary benefits, and testing for Internal Revenue Code limitations. Please be sure reported PPE dates are consistent for your payroll cycle.

Submitting inconsistent PPE dates may delay posting of contributions to member accounts. Payroll files will need to be corrected if submitted with an inaccurate PPE date.

The Difference Between PPE Date and Issue Date

• PPE date: End date of the payroll cycle in which employees worked or earned wages for which they are being paid.

• Issue date: Paycheck date or the actual date employees are paid.

Examples of PPE Dates

Monthly Pay Cycle

• A monthly pay cycle can have a PPE date as any day of the month but should be a consistent date each month. The PPE date will always be the same day of the month or the last day of the month. 
  
  For example:
  

  The pay period could run from February 16 through March 15. In this scenario, the PPE date will always be reported as the 15th of the month. OR The pay period could run from March 1 through March 31. In this scenario, the PPE date will always be reported as the last day of the month.

Semi-monthly Pay Cycle

• A semi-monthly pay cycle would always run from the 1st through the 15th and the 16th through the last day of the month. In this scenario, the PPE date will always be reported as the 15th of the month or the last day of the month.

Bi-weekly Pay Cycle

• A bi-weekly pay cycle will always be 14 days.
  
  For example:
  

  A bi-weekly pay cycle may start on Sunday, April 4, and end on Saturday, April 17. The PPE date reported to the Division would be April 17. In this scenario, the PPE date will always be reported to the Division as a Saturday.

Weekends and Holidays

An employer's PPE date should not change due to a weekend or a holiday.

Weekends

• The Division frequently encounters PPE errors when an employer reporting as semi-monthly or monthly finds their pay period ending date falling on a weekend.
  
  For example:
  

  If the PPE date would normally be January 31, but January 31 is a Sunday, the employer should still report the pay period ending date as January 31 despite the PPE falling on the weekend.

Holidays

• If the PPE date would normally be May 31, the employer should still report May 31 as the PPE date despite May 31 being a holiday.

Exceptions to Submitting Consistent PPE Dates

• The only exception for not submitting an expected PPE date based on payroll cycle is at teacher service year-end for TRS employers.

Please work with your Division payroll contact to determine the correct PPE dates for school year-end reporting.

Questions?

If you have any questions as to what PPE date should be submitted or if you need to change your pay cycle, please reach out to your Division payroll contact.

TRS 2022/2023 Year-End Reporting

Do Not Forget to Submit TSE Events!

As the end of the school year approaches, it is time to revisit the year-end reporting procedures for the Teachers’ Retirement System (TRS). It is important that the year-end reports are submitted timely and each member’s school year contributions and salaries are correct in the TRS.

Please check your email for the TRS 2022-2023 year-end letter with more specific information regarding end-of-year reporting.

Enter TSE Events

Teacher’s Service End [TSE] event dates for teachers returning for the 2023-2024 School Year or TERM event for teachers who are not returning must be reported for ALL teachers at the end of the 2022-2023 school year. The TSE date to be entered will be the day after the last day worked for the school year or June 30, 2023.

Please note that any payroll information received after July 15, 2023, will not be posted to the members’ accounts before the annual interest calculation, nor will it appear on the members’ 2022-2023 TRS annual statement. This could be a significant amount since many of the closing reports include three or four months of contributions and salary information for members. 

Summer Employment

For those TRS members whose contracts require working during the summer, summer wages should be reported on July and August payroll reports using the employer match percent for the 2022-2023 school year. This includes TRS members who:

• Have contracts with a 12-month work schedule and payments scheduled for 12 months, or
• Have summer school teaching service that is covered under a newly written contract tied to the 2022-2023 school year and is separate from the school year contract. You must report a STAT back-to-work date and a second TSE date if the teacher has a break before the normal school year starts.

SB185: Rehired Retired Teachers—End of School Year Reporting

Teachers who are employed as a rehired retiree are required to have a TERM date submitted at the end of the contract year. Rehired teacher contracts are only valid for 12 months or until the end of the school year.

True-Up—Reminder to Review True-Up Records with Each Payroll Submission

The Division calculates Defined Contribution Retirement (DCR) true-up adjustments daily and provides them in eReporting. The true-up adjustments correct for over and/or under-reporting of the following contributions:

• DCR Employer match (ER),
• DCR Occupational Death & Disability (ODD),
• DCR Retiree Medical Plan (RMP),
• DCR Health Reimbursement Arrangement (HRA), and
• Defined Benefits Unfunded Liability (DBUL).

Please review the true-up report with each payroll submission. All true-up records for each year listed must be adjusted with each payroll submission, even if it is a net zero adjustment. The true-up will allocate the contributions to the proper money type.

Please reach out to your payroll contact if you have any questions regarding the true-up process or about specific true-up records in eReporting.

State and Local Government Employees in Positions Not Covered by Social Security

This information is for state and local government employers, including cities, towns, school districts, colleges, and universities, as well as government or public enterprises hiring new workers who are not eligible for Social Security. Section 419(c) of Public Law 108-203, the Social Security Protection Act of 2004, requires that employers in state and local governments must inform workers hired on or after January 1, 2005, in positions not covered by Social Security about the impact of the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). The statement explains how a pension from that job could affect future Social Security benefits to which the employee may become entitled. The WEP can affect the amount of an employee's Social Security retirement or disability benefit. The GPO can affect Social Security benefits received as a spouse, surviving spouse, or ex-spouse.

The statute mandates that newly hired public employees make a declaration confirming their knowledge of a potential reduction in their future Social Security benefit eligibility. Employees can find more information about this statute or view a copy of the statement on employment in a job not covered by Social Security at SSA.gov. The form can be reviewed at ssa.gov/forms/ssa-1945.pdf.

Employees hired on or after January 1, 2005, must receive this statement from the state and local government employers before starting employment. Employees must sign and date the form, and a copy of the signed and dated form must be submitted to the State of Alaska, Department of Administration, Division of Retirement and Benefits Audit Unit.

Once the form is downloaded, the employer or employee should legibly complete the Form SSA-1945 as follows:

• Employee Name
• Employee ID Number: Please provide the employee’s Social Security number
• Employer Name
• Employer ID: Please write the retirement system the employee is a member of, such as PERS, TRS, or SBS, and your employer number, if available
• Employee must sign and date the form

Employers should:

• Give the statement to the employee prior to the start of employment
• The employee must sign and date the form
• Submit a copy of the signed form to the pension paying agency (the Division of Retirement and Benefits, care of the Audit Section)
• Please send it to the following email address: doa.drb.audit@alaska.gov

The current version of Form SSA-1945 is available online.