Retirement Nuts & Bolts and Pre-Tax Accounts Training for Campus HR Retirement Administrators.
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Transcript of Retirement Nuts & Bolts and Pre-Tax Accounts Training for Campus HR Retirement Administrators.
Retirement Nuts & Bolts andPre-Tax Accounts
Training for Campus HR Retirement Administrators
Slide 2
AGENDA
• Limits/Contributions
• Rollovers/Information Sharing Agreements
• Reports-A-Palooza
• Intra-MnSCU Hires
• General Retirement Q & A
• Eide Bailly: HRA & MDEA
Retirement Plans: Contribution Limits
Gary Janikowski
System Director, Personnel
Slide 4
MnSCU Retirement Plans Affected by IRS Limits
• MnSCU Tax-Sheltered Annuity (TSA) Program
• State’s Deferred Compensation Program
• Individual Retirement Account Plan (IRAP)
• Supplemental Retirement Plan (SRP)
Slide 5
Contribution Limits
For all plans…
• IRS publishes limits annually
• State payroll system automatically stops deferrals once limits are reached
Slide 6
Tax-Sheltered Annuity (TSA) Program 403(b)
• Voluntary Plan
• MnSCU-sponsored
• No employer match
• Same investment funds as Individual Retirement Account Plan (IRAP) and Supplemental Retirement Plan (SRP)
Slide 7
TSA Limit Summary
Participant Age/YOS: Limit for calendar year 2009:
Under age 50 $16,500
Age 50+ $22,000 ($16,500 + $5,500)
Those with 15+ YOS at MnSCU Institutions, regardless of age1
$25,000 ($16,500 + $5,500 + $3000)
1Note: TIAA-CREF must calculate this limit. This additional limit can only continue for a five (5) year period.
Slide 8
Deferred Compensation Program 457(b)
• Voluntary Plan
• State-sponsored
• Administered by Minnesota State Retirement System (MSRS)
• Employer match available as per bargaining contract/personnel plan as long as employee is not SRP eligible
Slide 9
Deferred Comp Limit Summary
Participant Age/YOS: Limit for calendar year 2009:
Under age 50 $16,500
Age 50+ $22,000 ($16,500 + $5,500)
Those who are within three (3) years of normal retirement age1
$33,000
1Note: The MNDCP Service Center must calculate this limit.
Slide 10
Individual Retirement Account Plan (IRAP)
• Annual Earnings Contribution Limit $245,000
• Thus, the most that can be contributed in 2009 is $25,725:– 4.5 % employee @ $245,000 = $ 11,025
– 6.0% employer @ $245,000 = $ 14,700
$ 25,725
Slide 11
Annual Additions Limit (415 limit)
• The Annual Additions Limit is the total amount (both ER and EE contributions) that can be deferred by an employee
• For 2009, the limit is $49,000
• This limit includes the Supplemental Retirement Plan (SRP) and the Individual Retirement Account Plan (IRAP)
Questions?
Rollovers/Information Sharing Agreements: IRS Guidance for 403(b) Plans
Dirk Camiletti
TIAA-CREF
Slide 14
Final 403(b) RegulationsEffective Dates
• Issued July 26, 2007
• The effective date under the final regulations was generally January 1, 2009
Slide 15
Final 403(b) RegulationsTransfers to Unapproved Vendors
• Revenue Ruling 90-24 permitted participant to do a direct transfer between 403(b) contracts even if the contract was not approved under the plan (“90-24 transfers”).
• After 9/24/07, transfers to contracts issued by unapproved vendors prohibited unless the vendor agrees to share information necessary for compliance with the employer
– Information Sharing Agreement (“ISA”) needed.
– Loans, hardships, termination of employment
– Can’t rely on employee representation
• Transfers to unapproved vendors after September 24, 2007, must have an ISA in place by January 1, 2009.
Slide 16
Information Sharing Agreement Facts
Information Sharing Agreements are:
Agreements that are entered into between 403(b) Plan Sponsors, such as MnSCU, with non-approved TSA financial providers (e.g., MetLife, Thrivent Financial, etc.) to share information on current employee 403(b) accounts.
MnSCU does not enter into Information Sharing Agreements.
Slide 17
Final 403(b) RegulationsInformation Sharing with Approved
Vendors
• Employer and approved vendors must also share information related to tax compliance requirements to ensure plan’s operational compliance
– No separate ISA required
• Vendors (approved or unapproved with ISA) cannot rely on employee representation
– loans, hardships, termination of employment
Slide 18
Revenue Procedure 2007-71Transitional Rules for Information
Sharing
• “Grandfathered” Contracts –
– No information sharing required
– Vendors deselected prior to 2005
– 90-24 transfer to unapproved vendor prior to 9/25/07
• “Orphan” Contracts
– “reasonable good faith effort” to share information required
– vendors deselected after 2004 and prior to 2009
– 90-24 transfers to unapproved vendor between 9/25/07 and 1/1/09
Slide 19
Revenue Procedure 2007-71Transitional Rules for Interim Contracts
• Transfers to unapproved vendors after 9/24/07
– If no ISA on 1/1/09, re-exchange into contract of approved vendor or contract of unapproved vendor with ISA
– Up until 6/30/09 to re-exchange
– No information sharing required for interim contract
– Alternatively, reasonable good faith standard available
Slide 20
Rollover Process
Campus HR offices are not authorized to sign off on employee rollover and distribution requests under the MnSCU Defined Contribution Plan and Tax-Sheltered Annuity Plan.
Please forward all such requests to the OOC for research and signature.
Slide 21
Case Study: Rollovers
Eligible Rollovers
•IRAP & SRP
– New Hire / In-Service
– Post Termination
•TSA
– New Hire / In-Service
– Post Termination
Slide 22
Rollover Information
With respect to rollovers…..
Participants can rollover contributions from outside eligible plans into the MnSCU defined contribution plans.
The rollover authorization form is available on the MnSCU HR web site at:
http://www.tiaa-cref.org/pdf/F8872.pdf
Slide 23
Legal Disclaimer
This PowerPoint is for informational purposes only and the statements made during this presentation represent TIAA-CREF’s interpretation of applicable law. It is presented with the understanding that TIAA-CREF (or its affiliates, distributors, employees, representatives and/or insurance agents) is not engaged in rendering legal or tax advice.
Slide 24
Thank you for joining us!
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY.
©2009 Teachers Insurance and Annuity Association-College Retirement Equities Fund, New York, NY 10017
C45429
Questions?
Reports – A- Palooza
Barb Biljan
HRIS Lead Management Analyst, Personnel
Welcome to Reports-A-Palooza
Reviewing reports that will help make selecting and coding retirement easier
The HR 7010 Report is a valuable tool to help manage retirement issues for employees.
It is recommended that campuses run this report every payroll period.
Reports-A-Palooza
Slide 29
HR Reconciliation Queries
Retirement Code Blank
Retirement Status Code Blank
Errors on Unclassified Retirement
Errors on Classified Retirement
Phased & AEP Errors
Reports-A-Palooza
Slide 30
• Blank reports mean no errors
• Any data returned is inaccurate or missing and should be corrected
• Export reports to Excel
Reports A Palooza
Slide 31
Supplemental Retirement Reconciliation Queries
• SRP Code is blank
• SRP Code is Y, but Deduct Code is blank
Reports-A-Palooza
Slide 32
Reports-A-Palooza
SRP Annual Review Process
• Possible Newly Eligible Employees
• All SRP on all assignment data – includes classified & unclassified
• SRP deduction code information
Slide 33
Reports-A-Palooza
End of Fiscal Year
SRP Annual Review includes:
• Step-by-step process on website
• Includes eligibility information
• Flow chart for eligibility
• Missed deductions forms
Slide 34
• Phased Retirement Query
• Annuitant Employment Program Query
• TRA Annual Reports Queries
Reports-A-Palooza
Questions?
Intra-MnSCU Hires
Mary Muenchow
Director of Personnel
Slide 37
Intra-MnSCU Hires
• Past service
• Concurrent service
• Sometimes University of Minnesota service
• One campus or multiple
Slide 38
Intra-MnSCU Hires
Affects both:
• IRAP
• SRP
Slide 39
Helps to Locate Other Service:
• SEMA4 Public Data
• Jobs Data in SCUPPS
• Multi-Campus Report
• New EE Retirement Checklist
• Call or e-mail
Intra-MnSCU Hires
Slide 40
Records of Prior Service:
• SEMA4 Public Data
• Jobs Data in SCUPPS
Intra-MnSCU Hires
Slide 41
New EE Retirement Checklist:
• Prior service date
• Concurrent work and location
• Retiree status information
Intra-MnSCU Hires
Slide 42
Multi-Campus Report provides information about concurrent work at another campus
Intra-MnSCU Hires
Slide 43
Basic rule for both IRAP & SRP:
Once eligible, always eligible
Intra-MnSCU Hires
Slide 44
Primary Retirement:
Election process is for MnSCU service only!
Intra-MnSCU Hires
Slide 45
Once per career choice for IRAP/TRA until this year: 7/1/09
New second election for newly tenured/permanent faculty
Intra-MnSCU Hires
Slide 46
Three flow charts on the website help to determine coverage:
• IRAP for unclassified employees
• IRAP for Administrators
• SRP
Intra-MnSCU Hires
Slide 47
Each Job Record Number has its own:
• Primary Retire Code
• Retirement Status Code
• SRP Eligibility Code
• SRP Deduction Code
Intra-MnSCU Hires
Slide 48
When taking over Job Records, must review retirement and SRP coding for each Job Record
Intra-MnSCU Hires
Slide 49
Intra-MnSCU Hires
Remember that SEMA4 will recognize only one retire code per job record for one deduction per payroll period
Questions?
Thanks for joining us!