On Jan. 8, Voya Financial will email DC participants who decreased their defined contributions below the rate needed to get the full employer match contributions. The email will show their current contribution rate, remind them how the match works, and encourage them to make the most of the employer match.
As a result, you may see an uptick in the DC Feedback File activity in January. In addition, if employees ask about the email, you can confirm that it is legitimate, and let them know that Voya provides your office this contribution rate information as well.
Effective Jan. 1, 2024, the interest rate charged on late payments will be 6.00%.
The rate of interest charged on any late contribution payment is determined by the actuarial rate of return from the prior year’s investments, less 2%; however, the rate cannot be less than 6%. The most recent calculated actuarial rate of return was 4.60%.
Delinquent payments of any amount are a serious matter. ORS Employer Reporting closely monitors reporting units in shortfall. Reporting units that repeatedly miss payments or make incomplete payments are at risk for increasing penalties. Check the statement balance due each pay cycle, then make payments in full and on time to avoid a daily (including weekends and holidays) assessment of interest on the delinquent balance.
For the legal requirements regarding late fees and interest, see Public Act 300 of 1980, specifically MCL 38.1342(7).
The Reporting Instruction Manual (RIM), section 8.02.02: Late payment fees and interest charges offers further information on this topic. If you have more questions, contact us at ORS_Web_Reporting@michigan.gov.
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The IRS determines limits to how much employees can contribute to a qualified plan each calendar year. The limits for 2024 are posted on the Voya website.
ORS calculates up to the yearly IRS contribution limit ($22,500 in 2023) using the employee contributions reported to ORS only. Once the annual IRS limit has been reached, column AZ on the download detail will indicate “Yes.” ORS will only charge for the 4% mandatory employer DC contribution rate after the IRS limit has been reached for members of the DC plan.
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If your reporting unit offers a deferred compensation plan outside the State of Michigan 401(k) and 457 Plans, your employees and reporting unit are responsible for monitoring the IRS limits made collectively to all 457 plans you offer.
You may save work for your reporting unit by monitoring amounts contributed to plans you offer. Any amount the employer withheld over the IRS limit needs to be refunded to the employee.
On Jan. 1, dates from 2023 will no longer be available on the Period End Date drop-down menu on your Enter Payment Information screen. At that point, when you’re making a payment, you will see only 2024 dates. If you need to make a payment for a 2023 report, please select the earliest date available on your drop-down menu.
In preparation for the 2024 Small Steps campaign, a comprehensive list of your reporting unit’s employees with a Defined Contribution (DC) component is now available upon request by emailing Employer Reporting at ORS_Web_Reporting@michigan.gov. Please use the subject line Small Steps list in your email.
Using the list you receive, please complete the following in preparation for the campaign. Note: The deferral rates on your list are as of October 15, 2023. The list you received is not final and is for reference only.
- Begin to clean up your feedback file before the Small Steps campaign begins. For instructions on how to do that, refer to the Reporting Instruction Manual (RIM) section 7.04.01: View DC Feedback File.
- Complete a Detail 4 (DTL4) termination record for each employee on the list that no longer works for your reporting unit. Refer to the RIM, section 7.04.02: Reporting a terminated employee on a DTL4 record for instructions about adding the required DTL4 record.
- Verify Social Security numbers (SSNs) are correct. Contact the Office of Retirement Services with any SSN issues or corrections before taking any action.
As part of the Small Steps campaign, employees in the Pension Plus plan, Pension Plus 2 plan, Defined Contribution (DC) plan, or Personal Healthcare Fund who are not contributing at least 15% to their State of Michigan 457 Plan in mid-December received this mailer from Voya Financial about their contribution rates.
A final comprehensive list of employees with a DC component will be included on the View DC Feedback File at the end of February.
If you have any questions related to reporting, email Employer Reporting at ORS_Web_Reporting@michigan.gov.
The reportability of early retirement incentive payments differs based on several factors.
For active members, these payments are nonreportable on a Detail 2 (DTL2) record but are reportable on a Detail 4 (DTL4) record, regardless of whether paid in a lump sum or paid over a period of time. See Early retirement incentives in RIM 4.03 Nonreportable compensation.
If a retiree returns to work directly for the reporting unit they retired from, that reporting unit must report all payments, including early retirement incentives, on a DTL2 record and a DTL4 record for that retiree.
If a retiree returns to work indirectly for the reporting unit they retired from, that reporting unit must report all payments, including early retirement incentives, on a DTL2 record but not on a DTL4 record for that retiree.
If the retiree does not return to work for the reporting unit they retired from, and that reporting unit makes a payment to the retiree, that reporting unit should not report those payments on a DTL2 record or a DTL4 record. This includes early retirement incentives.
See RIM 9.01 Earnings of retirees who return to work for more information.
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As noted in an email sent Nov. 30, Public Act (PA) 250 of 2023 was enacted Nov. 30. The law changes the default retirement plan for employees who are new to MPSERS. Employees who first work at a Michigan public school on or after July 1, 2024, and who do not elect a plan during their election window will become members of Pension Plus 2 rather than Defined Contribution.
For more information about the law, you can read our legislative summary or you can review the full text of PA 250 of 2023. ORS is updating related member communications, and we will keep you informed of those updates as they become available.
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Small Steps campaign mailers were mailed on Dec. 4, 2023. Eligible participant savings rates will be increased by 1% each year until they are saving 15% of their wages. Participants can opt out if they do not want their rate to be increased.
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