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Lump-Sum Payments and the Contingency Reserve
Dear PERS Employer:
PERS will use the Contingency Reserve to credit employers for employee contributions and to cover associated earnings attributable to the retroactive posting of Individual Account Program (IAP) employee contributions for lump-sum payments* made to Tier One and Tier Two members between January 1, 2004, and May 1, 2006.
Retroactive lump-sum payment adjustments must be posted in EDX no later than February 28, 2007, for contributions and earnings to be covered by the Contingency Reserve funds. If reported after that date, employers will be responsible for the retroactive employee contributions and associated earnings.
Employers are advised to enter these retroactive lump-sump payment adjustments as soon as possible to meet the February 28, 2007 deadline. We realize EDX functionality may not allow entry of some lump-sum adjustments by the February 28, 2007 deadline. Contingency Reserve coverage of those lump-sum adjustments will be addressed by a procedure outlined in a future communication.
PERS is working on the procedure to credit employers with Contingency Reserve funds. We anticipate completing that procedure by March 1, 2007, and crediting of employers will follow as soon as possible. PERS will provide more information in the near future.
Contributions and earnings on lump-sum payments made between January 1, 2004, and May 1, 2006, to Tier One and Tier Two members arose from a retroactive change in the definition of salary subject to IAP employee contributions contained in HB 2189 (2005). 
Thank you for your interest and assistance,
PERS Employer Relations Team 
* The majority of the retroactive adjustments attributable to the HB 2189 salary redefinition are for accrued vacation payments, but other payments were affected by the redefinition as well and may require retroactive adjustments. Allowances, bonuses not included in employees’ taxable income, and severance due to involuntary termination may have been previously reported as lump-sum payments. Consult the Payment Categories chart on the PERS Employer website for the proper EDX reporting category for any January 1, 2004, to May 1, 2006 lump-sum payment.