Parochial Employees’ Retirement System 2014 Administrative Training.
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Transcript of Parochial Employees’ Retirement System 2014 Administrative Training.
Who Is Eligible to Participate?
Mandatory participation for all full-time permanent employees who work 28 hours or more per week
Optional participation for 55 and older with 40 quarters in Social Security
Age 55 Opt Out
Employees age 55 at date of hire who also have 40 quarters of Social Security coverage have an option to participate in PERS
Employee must make an election within 90 days of date of hire
This is a one time irrevocable electionDoes not apply to rehired retirees
Eligibility of Elected Officials
Parish elected officials who are currently enrolled are allowed to remain in the plan
Parish presidents, justices of the peace and coroners are the only newly elected officials able to enroll in PERS
Contact our office with any questions concerning elected officials
Earnable Compensation
Regular wages and overtime are includable for purposes of retirement contributions
R.S. 11:1902 (11) provides the definition of earnable compensation
This definition specifically excludes fees and commissions
Earnable Compensation – Cont’d
R.S. 11:233 B provides additional exclusions from the definition of earnable compensation
Car allowances, lump sum payments for annual and/or sick leave, bonuses, and terminal leave pay are some of the exclusions listed in this statute
Normal Retirement Provisions
Members hired prior to 1/1/07Plan A
7 years and age 6510 years and age 6025 years and age 5530 years and any age
Plan B7 years and age 6510 years and age 6030 years and age 55
Normal Retirement Provisions
For members hired 1/1/07 and laterPlan A and B
7 years and age 6710 years and age 6230 years and age 55
Benefit Estimates
An employer or the member can request a written benefit estimate when the member is within 3 years of retirement eligibility
All estimate requests must be submitted in writing
Only one estimate allowed in a 12 month period
Submission of Proper Applications
Normal RetirementRetirement ApplicationEmployer Request FormCopy of Member’s Birth CertificateCopy of Spouse’s Birth Certificate if
member chooses Opt. 2 or Opt. 3Maximum Affidavit if member chooses
Maximum benefits
Submission of Proper Applications
DROPDROP ApplicationEmployer Request FormCopy of member’s birth certificateCopy of spouse’s birth certificate if member
chooses Opt. 2 or Opt. 3Maximum affidavit if member chooses
maximum
Submission of Proper Applications
Disability RetirementRetirement ApplicationEmployer Request FormCopy of Member’s Birth CertificateCopy of Spouse’s Birth Certificate if
member chooses Opt. 2 or Opt. 3Maximum affidavit if member chooses
maximum benefits
Disability Applications – Cont’d
Disability Claim FormDisability Report by Supervisor and
Personnel OfficerCopies of all medical records which
reference the disability
New Form Required
All applications for any form of monthly benefit must utilize our new form which requires both the retiree and spouse to have their signatures witnessed by a notary.
Leave Conversion
Members can convert unused & unpaid sick and annual leave at normal retirement or upon entry into DROP
Leave cannot be used to acquire eligibility
Amount of service granted is calculated by dividing the number of unused and unpaid days by 260
Leave Conversion – Cont’d
Cost of leave conversion is currently part of the employer contribution rate for active members hired prior to 1/1/07. For members hired 1/1/07 and later the actuarial cost of leave conversion will be paid by the employer at the time of the member’s retirement
Overtime & LWOP
6 years of overtime earnings are required when a member receives overtime pay. Employers are responsible for maintaining these records.
Send written notification of the exact dates of leave without pay. This will affect service credit and eligibility.
Retiree Return to Work
If a retiree returns to work on a full time basis, his benefit will cease and he will begin contributing to the retirement system
If a retiree returns to work in a part-time capacity, the number or hours is limited
480 hours per calendar year or 1,040 hours per calendar year if retired 3 or more years and age 65
Actuarial Transfer of Service
If a member has service credit in another state or statewide retirement system in Louisiana, he can apply to transfer that service once he has 6 months of service credit in PERS. The same is true if a former member of PERS wishes to transfer our service to another state or statewide retirement system.
Actuarial Transfer of Service
An Application for Actuarial Transfer of Service must be filed with the system that the member is actively contributing to.
This form can be found on our website.Application fee of $100 must accompany
the form
Employer Rates 2015
Employer rates have been set as follows effective 1/1/2015:Plan A = 14.50%Plan B = 9.00%PRSAC has met and has approved this
valuation.
What Can We Do to Control Costs?
Actuarial EquationContributions + Investment Earnings =
Benefits + ExpensesThe 3 major components in this equation
are contributions, investment earnings and benefits.
Expenses are a small part of the equation. The cost of administering the system was $46 per member during 2013
Cost Sharing Provisions Implemented in 2010
SB 85 0f 2010 permits the Board to set the employee contribution rate higher in both Plan A and Plan B.
This will allow for cost sharing if the employer rate is scheduled to increase from current levels.
Employee rates will remain at 9.5% in Plan A and 3% in Plan B for 2015
Cost Saving Measures Already In Place
A new plan of benefits was put in place for new employees hired 1/1/07 and later
Provisions include:Five year FACEligibility requirements changed:
7 years and age 6710 years and age 6230 years and age 55
Cost Savings - Continued
7 years of service required for disability retirement. In addition, the definition of disability was changed. A member must be unable to perform any type of gainful employment
Actuarial cost of leave conversion will be paid by each individual employer at the time of the member’s retirement
Pension Changes Still Sweeping the Country
Although changes are still being made to plans across the country, the rate of change has slowed
States continue to make changes to employee contribution rates and COLA provisions
Cash balance plans or defined contribution plans are still being considered as substitutions for defined benefit plans
GASB 68
GASB 68 provides new accounting and reporting rules for employers
The new standard will require the employer to report its proportionate share of the liability of the pension plan on its financial statements.
Our actuary will calculate the proportionate share for each participating employer in PERS
GASB 68
This new standard also requires changes to the note disclosures in the employer’s financial statements. These will be prepared by your auditors.
This new standard takes effect for fiscal years beginning in 2015.
GASB 67
GASB 67 revises financial reporting for pension plans.
Effective for fiscal years ending June 30, 2014 and calendar years ending December 31, 2014
This statement will require the retirement system to conduct a sampling of payroll audits of participating employers to determine that only eligible members are enrolled and that salaries are being properly reported
Mandatory Social Security
In Louisiana, 72% of state and local government employees are not covered by Social Security
Mandatory coverage is considered as a revenue raiser for the Federal Government
Mandatory Social Security
Mandatory coverage could surface as part of an overall package designed to make State and local governments “reform” their pensions
Contact Your Congressman
Let your congressman know the number of active members covered by our retirement system
Our plans share costs between employee and employer
Investment and longevity risks are pooled Mandatory coverage will increase Social
Security’s liabilites The Social Security Act of 1935 specifically
excluded state and local governments from Social Security
Divided Referendum
Act 280 of 2004 allows a divided vote for Medicare coverage for those employees hired prior to 4/1/86 who currently do not pay Medicare
In order to receive Medicare Part A at no cost, you must have 40 quarters of Medicare coverage
With at least 30 quarters, Medicare Part A would cost $244 per month
Divided Referendum
With less than 30 quarters of Medicare coverage, Medicare Part A would cost $443 per month
To conduct a divided referendum contact Angie Dowdy at the State Treasurer’s office: 225-342-0026
Distribution of Summary of Principal Features
Our updated Summaries through the 2014 Legislative Session will be mailed this month
Sufficient copies for all active membersPlease distribute only to those covered
by PERSCopy of the current Summary located on
our website
Reporting Due Dates
Salary and contribution reports are due on a quarterly basis. The due dates are January 15, April 15, July 15 and October 15
Your report along with your check must be received in our office on the due date.
Reporting Due Dates
If your report is not received in our office by the deadline, the late penalty assessed is 1.5% of the total remitted
If you will be remitting close to the deadline it may be cost effective to use an overnight delivery service in order to avoid the penalty:
$12.95 is less than 1.5% of $200,000 ($3,000)