EMPLOYERS

In this update:

1. Changes to the process of reporting contributions effective January 1, 2016.

2. April processing tip.

3. Reminder: PERS retirees returning to work.

4. Reminder: Please check the Average Overtime Hours information for your employees.

5. Reminder: Speech Pathologist and Speech Pathologist Assistant Tier One/Tier Two retiree work hour exemption is active
March 1, 2016.

1. Changes to the process of reporting contributions effective January 1, 2016.

The process of reporting contributions changed effective January 1, 2016. Employer Announcement #97: Member and Employer Account Contribution Requirements outlines reporting  changes mandated by HB3495. 

HB3495 was passed in the 2015 legislative session, became effective January 1, 2016 and affects all who establish OPSRP membership on or after January 1, 2016. HB3495 requires contributions for those establishing OPSRP membership on or after January 1, 2016 begin with the first full pay period after the membership date. If any pay date on or after a January 1, 2016 membership date covers a pay period which includes waiting time, no contributions are due for that pay date because the first full pay period after an OPSRP membership date would not include waiting time. Retirement credit would be granted for the pay period but no contributions would be due.

The example below illustrates a pay period which begins December 28, 2015, ends January 8, 2016 with a pay date of January 22, 2016. An employee in this scenario establishes OPSRP membership January 1, 2016 so no contributions are due for this January 22 pay date since the covered pay period includes waiting time.  The example outlines reporting of this pay period for local government and non-local government employers.  Non-subject salary would be used to report segments of the pay period which include active service, since the only way to use DTL2 wage code 01 without contributions is to enter reported salary as non-subject.  Non-subject salary is used only when reporting a pay date for a pay period which includes waiting time.  

Example: On or after January 1, 2016: Reporting contributios for the first pay date on or after OPSRP membership is established: An employer's pay period begins December 28, 2015, and ends January 8, 2016, with a January 22, 2016 pay date. A reported individual becomes an OPSRP member January 1, 2016. The individual works 80 hours for the two-week period for a reported salary of $2000.00.

Reporting by a Local Government employer:
For this pay period WPBED are used on both of the
two required DTL2 records. Salary on the first record is
"Subject" and salary on the second record is "Non-subject."
Contributions are entered on neither record
.

Reporting by a non-Local Government employer:
Non-local government employers NEVER use WPBED.
For this pay period, salary is "Non-subject" and no
contributions are entered.
   

DTL2 #1:
Pay Date: 01/22/2016
Work Period Begin Date:12/28/2015
Work Period End Date: 12/31/2015

Hours Worked: (Regular) 40.00
Reported Wage Code: 01
Subject Salary, Regular: 1000.00
Non-Subject Salary: (blank)

Contributions: (blank)        

DTL2 #2:
Pay Date: 01/22/201
Work Period Begin Date: 01/01/2016
Work Period End Date: 01/08/2016

Hours Worked: (Regular) 40.00
Reported Wage Code: 01
Subject Salary, Regular: (blank)
Non-Subject Salary: 1000.00

Contributions: (blank)
 
DTL2:
Pay Date: 01/22/2016
Work Period Begin Date: (blank)
Work Period End Date: (blank)
Hours Worked: (Regular) 80.00
Reported Wage Code: 01
Subject Salary, Regular: (blank)
Non-Subject Salary: 2000.00

Contributions: (blank)

2. April processing tip

This is a good time to begin review of employee work histories to see who's on pace to exceed 600 hours in calendar year 2016. Based on that information, you may wish to submit a Demographic Correction Request (DCR) to your ESC account representative to change any job segment Position Type from "non-qualifying" to "active service" so you can begin submitting DTL2-01 records for those who appear to be on pace to qualify in 2016.

Work hour information on these employees will be available through the Year-to-Date Wage and Contribution Summary screen once you've posted DTL2 records in calendar year 2016 for these individuals. Your ESC Account Representative is available to assist you with these determinations at any time.

3. Reminder: PERS retirees returning to work.

Tier One/Tier Two retirees:

After retirement, Tier One/Tier Two retirees may return to work for a participating PERS employer(s) and continue to receive their retirement benefits as long as they do not work 1,040 hours or more in a calendar year. A Tier One/Tier Two retiree may work up to 1039.99 hours per calendar year and still be considered a retiree, but a Tier One/Tier Two retiree will re-establish active membership if they equal or exceed the 1040 hr. limit in any calendar year. The 1040 hour limitation for retirees returning to PERS employment is commonly referred to as the "1040 hour rule." (Please Note: The 1040 hour rule does not apply to OPSRP retirees). 

In addition, Tier One/Tier Two retirees hired into certain positions (listed in ORS 238.082(4)-(8); Sections 2 and 3, chapter 499, Oregon Laws 2007; and Sections 3 and 4, chapter 774, Oregon Laws 2007) may work unlimited hours post-retirement for a participating PERS employer and continue to receive retirement benefits. In order to qualify for these statutory exemptions, the retiree must satisfy all the requirements for the exemption. A common requirement to qualify for these statutory exemptions is that the Tier One/Tier Two member does not receive a reduced service retirement allowance as set forth in ORS 238.280(1), (2) and (3). (PLEASE NOTE: These exemptions are not available to OPSRP retirees).

Age/Service time requirements for Tier One/Tier Two retirement with an unreduced service benefit ("normal" benefit recipient):

 
Age
 
PERS Service Time
Classification
Tier One
Tier Two
General Service
58
60
Any age with 30 years of service
Police and Fire
55
55
Age 50 with 25 years of service


Age/Service time requirements for Tier One/Tier Two retirement with a reduced service benefit ("early" retiree):

 
Age
 
PERS Service Time
Classification
Tier One
Tier Two
General Service
55-57
55-59
Less than 30 years of service
Police and Fire
50-54
50-54
Less than 25 years of service


*An inactive police officer or firefighter (P&F) Tier One or Tier Two member who attains the age of 50 may retire with a reduced benefit as long as their last covered position was a qualifying P&F position.

Tier One/Tier Two "early" retirees may qualify for a limited number of exempt positions listed in ORS 238.082(4) and Section 3, chapter 774, Oregon Laws 2007: 

This exception applies to a Tier One/Tier Two "early" retiree* who is employed:

Effective date of the exception

Date the exception expires:

As an administrator or teacher by a school district or educational service district that has its administrative office located in a county of 35,000 or less population.

This exception was amended in 2007. The amended exception is in two parts:

1/1/04-7/15/07 N/A
1) As an administrator or teacher by a school district or community college district located in a county of 35,000 or less population; or 7/16/07 N/A
2) as an administrator or teacher by an educatiuon service district and the retired member's primary work duties are performed in a county of 35,000 or less population. 7/16/07 N/A
By a school district or education service district as a speech-language pathologist or speech-language pathologist assistant. 7/16/07 1/2/26
Is on state active duty with the National Guard and has reached "normal" retirement age. (ORS 399.075(8)). 6/11/03 N/A
By the Legislative Assembly of the Oregon State Police for service time during a legislative session. (ORS 238.092(2)). 7/16/07 N/A
As a teacher of career and technical education (licensed by the Teacher Standards and Practices Commission to instruct any career and technical education course or program in any career and technical field). 6/18/15 6/30/18

 
(*)  An "early" retirement benefit is actuarially reduced because the member starts receiving benefits before normal retirement age. Unless the member has 30 years' service credit, Chapter 238 Tier One general service members retiring between ages 55 and 57 and Chapter 238 Tier Two general service members retiring between ages 55 and 59 are considered "early" retirees. Chapter 238 Tier One/Tier Two Police & Fire members retiring between ages 50 and 54 without 25 years' service credit are considered "early" retirees. Only a limited number of 1040 exceptions are available to "early" retirees, and an "early" retiree must wait six full months after retirement before he/she can be employed in a position under any 1040 exception that is available to early retirees. An "early" retiree who does not wait 6 full calendar months after PERS retirement before being hired into one of these DOES NOT QUALIFY for the exemption and is subject to the 1040 hour/calendar year work limit.  

The positions available to "early" Tier One/Tier Two retirees and listed here can also be found in the "Working After Retirement: 1040-Hour Exceptions" table. (Positions open to Tier One/Tier Two "early" retirees are noted in the "Early Ret." column.)

The exemption from the 1040 hour/calendar year limit APPLIES TO THE POSITION listed in ORS 238.082, NOT to the retiree holding the position.  

Example 1: A Tier One/Tier Two "normal" benefit recipient, hired by an employer into an exempt position, may work unlimited hours WHILE IN THAT EXEMPT POSITION. If the retiree leaves that exempt position and goes to work as a retiree for another PERS employer in a position NOT listed in ORS 238.082 or OAR 459-017-0060, the retiree becomes subject to the 1040 hour/calendar year work limit while working in that non-exempt position.

Example 2: If the retiree works concurrently in an exempt position and a non-exempt position, the hours worked in the non-exempt position will be subject to the 1040hour/calendar year work limit. 

Tier One/Tier Two retirees who have reached federal Social Security full retirement age (65-67, depending on the retiree's birth date) may work unlimited hours with PERS employers beginning the first of the month after the month in which Social Security full retirement age is reached. This exception does not apply to OPSRP retirees

OPSRP retirees:

Hiring an OPSRP retiree into a position with "qualifying" hire intent CANCELS the individual's retirement and re-establishes active membership immediately upon hire. Hiring an OSPRP retiree into a position with "non-qualifying" hire intent allows only 599.99 hours of work (total for ALL PERS employers) per calendar year. The OAR amendment adopted at the July 31, 2015 Board meeting clarifies PERS administration for OPSRP retirees who return to work for a PERS employer after retirement, and explains how PERS restarts the clock if an OPSRP retiree returns to work in a non-qualifying position in the same year in which they retire. PLEASE NOTE: None of the positions listed in ORS 238.082(4)-(8); Sections 2 and 3, chapter 499, Oregon Laws 2007; and Sections 3 and 4, chapter 774, Oregon Laws 2007 are open to OPSRP retirees.

You may hire an OPSRP retiree into a non-qualifying position immediately after retirement and submit the DTL1-11 record at that time. In most cases that DTL1-11 record and any DTL2-07 records will suspend until EDX has been updated to reflect the OPSRP member's transition from active to retired status. If the DTL1 and DTL2 records suspend upon submission, you do not need to "re-Save" those records for 90 days or until you have: 1) Verified with the retiree that they have received their first benefit check, or 2) Checked with your ESC Account Representative that the individual is in retired status.

Also, NEVER submit a DTL1-15 record to re-hire an OPSRP member as a retiree unless your ESC Account Representative asks you to do so.

4. Reminder Please check the Average Overtime Hours information for your employees.

The Average Overtime Hours entry on the DTL1 Member Demographics record represents the average overtime in any calendar year allowed for those positions in a class of employees with an employer (teacher, firefighter, receptionist, payroll specialist, etc.). This value controls how much overtime money paid in any calendar year can be used in the calculation of an OPSRP member retirement benefit. Incorrect coding of this benefit can significantly "short change" the amount of overtime money paid to an OPSRP employee in any calendar and used in benefit calculation, greatly affecting the individual's retirement benefit.

You can find the recorded Average Overtime Hours value for any of your employees using this procedure:

1) In the Site Navigation of any EDX page, click the "View Employee Info." link.

2) When the Search screen appears, enter the employee's last name or Social Security number or PERS ID number, and click "Search."

3) The "Employee Employment History Details" screen will appear. The recorded Average Overtime Hours value for the member is located on this screen.

OR...

Contact your ESC Account Team Representative to request a list of all your active employees which will include the Average Overtime Hours value currently coded for each of those employees.

5. Speech Pathologist and Speech Pathologist Assistant Tier One/Tier Two retiree work hour exemption is active March 1, 2016.

The Tier One/Tier Two Speech Pathologist/Speech Pathologist Assistant position exemption from the 1040 retiree calendar year work hour limit was re-activated effective March 1, 2016 and extended to January 2, 2026 with the Governor's signature on 2016 legislation. The exemption for this position applies to Tier One/Tier Two retirees only.

Please contact your ESC Account Team Representative for action required to once again document Tier One/Tier Two retirees in these positions as exempt from the Tier One/Tier Two 1040 hour/calendar year work limit, effective March 1, 2016.

This position was in non-exempt status from January 1, 2016 – February 29, 2016, a period so short that no retiree is in danger of exceeding the 1040 hour/calendar year retiree work limit prior to re-entering exempt status working as a Speech Pathologist/Speech Pathologist Assistant for a school district or educational service district.

Please contact your ESC Account Team Representative if you have questions about this topic.