Employer News | Quarterly Newsletter | Winter 2024

• BEARS Update
• IRS Pension Plan Limitations for Calendar Year 2024
• Roles of Compliance Auditors at the Division of Retirement and Benefits
• New Year—Verify Employer Contacts
• Full Backouts
• Employer Resources
• Counseling Resources for Employers and Employees
• Submitting Beneficiary Designation Forms to Empower Retirement

BEARS Update

The design and development of the Division of Retirement and Benefits' (Division) new BEnefits And Retirement System (BEARS) is well underway, and the Division is preparing to move into the testing phase for the program. We anticipate transitioning to BEARS in late 2024 and are very excited about the possibilities and benefits of this new system.

As part of this transition, State of Alaska employers will be required to modify their files in order to work with the new system. We are in the early stages of testing file layouts and are currently working with several employers to ensure a streamlined process before we ask everyone to make the transition.

In the coming months, we will reach out to employers to discuss required changes to payroll reporting, schedule training on the new system, and answer any questions that may arise. While we don’t have specific information to distribute at this time, we are happy to answer questions or take any comments. Please feel free to email us at DRB.BEARS.Communication@alaska.gov.

IRS Pension Plan Limitations for Calendar Year 2024

The Internal Revenue Service (IRS) has announced the 2024 calendar year pension plan limitations. The pension plan limitations that specifically apply to the pension contributions submitted to the Division include:

• 401(a)(17) Compensation Limit – For calendar year 2024, the compensation limit is increasing to $345,000. The compensation limit is the maximum amount of an employee’s compensation that is allowed to be used to determine the employer’s contribution. This limitation applies to the PERS, TRS, JRS, and EPORS. Gross earnings and Employer contributions are still due to the Division if an employee’s compensation exceeds the limit.
  
  
• 457 Deferred Compensation (DCP) Limits – For calendar year 2024, the DCP contribution limit is $23,000. Participants are allowed to contribute an additional $7,500 in the year they turn age 50 or greater for an annual maximum of $30,500. This represents the annual allowable of $23,000 plus the additional $7,500. The three-year catch-up maximum is $46,000. This represents double the annual maximum of $23,000.

SBS Limitation for Calendar Year 2024

The Social Security Administration has announced that the 2024 calendar year base wage is increasing to $168,600 (Social Security Contribution Base). The Supplemental Annuity Plan (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 to meet or exceed the limitations, please reach out to your payroll contact.

Roles of the Compliance Auditors
at the Division of Retirement and Benefits

The Division currently has a compliance team of two auditors and one audit lead, whose role is to provide an independent and objective assessment of the operational aspects of public retirement systems. These auditors work to ensure the integrity of these systems, internal controls, and record retention, all of which are essential for the confidence of employees, retirees, and other stakeholders. The team aims to audit each employer every four years.

The auditors work closely with Alaska’s Political Subdivisions to audit the administration and reporting for Alaska’s qualified public retirement systems. The sectors covered include state and municipal governments, educational institutions and districts, public safety, and housing authorities.

The following are the types of retirement systems subject to the audit team for compliance:

1. PERS: The Public Employees' Retirement System is comprised of a defined benefit retirement plan and, for employees hired after June 2006, a defined contribution retirement plan. PERS covers most state government employees, excluding teachers and certain public safety employees. It provides retirement, disability, and death benefits to eligible members.
   
   
2. TRS: The Teachers' Retirement System is specifically for certified or otherwise qualified teachers and educational employees in Alaska. Like PERS, it is also comprised of a defined benefit retirement plan and, for employees hired after June 2006, a defined contribution retirement plan.
   
   
3. SBS-AP: The Supplemental Annuity Plan is a supplemental retirement plan available to employees covered under PERS. Currently, 21 employers, including the State of Alaska, offer SBS-AP to eligible employees. Participation is considered in lieu of Social Security.
   
   
4. DCP: The Deferred Compensation Plan is a voluntary retirement plan available to employees of the State of Alaska and participating political subdivisions. Employees contribute a portion of their salary to individual accounts on a pre-tax or post-tax basis. Currently, 25 employers, including the State of Alaska, participate in the DCP.

For more detailed information on the above plans, please visit the Employee Benefits webpage.

Key Roles

The key roles of the Division auditors include internal control evaluation, assessment of system compliance, evaluation of fraud detection, and system reporting and communication.

• Internal Control Evaluation: The auditor assesses the internal controls of the retirement systems to determine their effectiveness in safeguarding assets and promoting compliance with laws and regulations. This includes evaluating control procedures, identifying weaknesses or deficiencies, and making recommendations for improvements.
  
  
• Assessment of System Compliance: The auditor examines whether the retirement systems follow relevant laws, regulations, and contractual obligations. This includes assessing adherence to contribution and benefit provisions, statutory requirements, and any other applicable rules.
  
  
• Evaluation of Fraud Detection: The auditor is responsible for assessing the risk of fraud within the retirement systems and conducting procedures to detect and prevent fraudulent activities. This involves analyzing transactional data, identifying potential red flags, and reporting any suspected fraud or irregularities.
  
  
• System Reporting and Communication: The auditor prepares an audit report summarizing their findings, conclusions, and recommendations. This report is typically provided to the management of the retirement systems and the governing bodies, such as the Alaska Retirement Management Board (ARMB). The auditors will communicate with management throughout the audit process to address any significant issues or concerns.
  
  
• State Social Security Administrator (SSSA): The DRB Audit Unit is the home of the SSSA. The SSSA is there for employers and employer payrolls to provide help and advice regarding any participation in Social Security. The SSSA, working with their Social Security agency contact, can help interpret how Section 218 of the Social Security Act impacts the employer and correct courses of action with Rehired Retirees.
  
  Please note that the SSSA is a provision for employers only and cannot provide advice to individuals or employees on their unique Social Security situation.
  
  To locate the SSSA for Alaska, visit the National Conference of Social Security Administrators webpage.

New Year—Verify Employer Contacts

All employers must keep their agency contact information up-to-date. This is how the Division will notify you of important information and/or changes. It also permits us to exchange information with your staff. If your staff member is not on the list, we cannot discuss information with them.

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

Please work with your Active Payroll contact to verify all employer contacts are correct.

Full Backouts

Employers, please inform your Division payroll contact before you perform 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 may have been incurred that cause the account balance to be less than the back-out. Employers are responsible for all market losses or fees imposed by Empower Retirement for backing out ineligible contributions.

One way to prevent full backouts is to check, review, and verify all information BEFORE submitting personnel information. Check to ensure the employee is hired into the correct plan—either Defined Benefit (DB) or Defined Contribution (DCR)—and verify the Social Security Number has been entered accurately.

Employer Resources

The Division of Retirement and Benefits provides educational seminars, in-person and virtual, on all the benefit plans and systems we administer. Below you will find useful resources for you and your Employees.

Seminars

The Division of Retirement and Benefits provides education on all benefit plans and systems we administer. You can view and register for the upcoming seminars by clicking the button below.

Pre-Recorded Seminars

The Division has created a video series designed for State of Alaska employees and employees of political subdivision employers who participate in the Defined Contribution Retirement Plan (DCR), first hired on or after July 1, 2006.

Counseling Services

We Are Here to Help

The Division of Retirement and Benefits offers many options to help you achieve your retirement goals. We are dedicated to working with you to answer your retirement plan questions and prepare you for retirement readiness.

• Counseling, one hour, Monday - Friday, 8 a.m. - 4 p.m.
  • In-Person
  • Telephonic
• Walk-in, 15 minutes, Monday - Friday, 8 a.m. - 4 p.m.  
  • Retirement Application Review and Submission
• Retirement Application Review, Juneau Only, 30 minutes, Monday - Friday, 8 a.m. - 4 p.m.
  • In-Person
  • Telephonic
  • Review and Submit Forms, Documents, and DRB Notary Services (for DRB forms only)
• Webinars
  • Available upon request
• Site Visits
  • Available when Counseling staff is approved for travel, annual advance notice is required.
    
    

Counseling Resources for Employers and Employees

If you are an employer participating in the Public Employees' Retirement System (PERS), the Teachers' Retirement System (TRS), the Alaska Supplemental Annuity Plan (SBS-AP), or the Alaska Deferred Compensation Plan (DCP), you have a wealth of resources readily available by phone, email, and online.

Counseling meetings are very helpful in preparing employees for retirement. No matter how close or far they are from the big moment, it is a good idea to learn more about their PERS or TRS benefits.

Meet Your Counselors

Each employer has a specific counselor, assigned by region, who is available to help you and your employees understand the State of Alaska benefits you may offer. Your counselor can coordinate and conduct educational events designed to reach any size audience, from one-on-one consulting with the employer or member to webinars designed to reach the entire workforce. Our counseling team is always looking for innovative ways to connect with employers and members of the benefit plans and are ready to assist you in any way they can.

In addition to the counselors dedicated to employers by region, we have counselors available to assist your employees on an individual basis by phone or via video conferencing platform.

Be sure to stay in touch with your counselor.

Regional Counselors

Juneau Counselors

Along with the expertise of our counseling team, employers can find information specifically for them on our Employer Resources webpage. This includes Employer Reporting, Retiree Return-to-Work and Bona Fide Separation, Employer Toolkit, Payroll Processing Standards, and more.

Appointments

To make an appointment with a counselor, please visit our Counseling Services webpage. Teleconferences can be scheduled for individuals and couples. For couples, if both are members and would like to discuss their retirement together, please book back-to-back video appointments with the same counselor for each employee. This ensures we not only prepare for both members but allows plenty of time to talk about both retirement plans. The member will receive a confirmation email after scheduling the meeting and a reminder email the day before. If they need to reschedule, the confirmation email will have a link to follow.

Our counselors are here for you and your employees. Don’t hesitate to pick up the phone, send an email, or recommend your employees make an appointment using the online scheduler.

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 been 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.

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.