Table of Contents
- Disability Recipients' Benefits Suspended
- Annual Compensation Limits in 2016 for Retirement System Contributions
- Retirement Systems Approaching Peak Season for Retirement Processing
- Coming Soon: 2015 Annual Benefits Statements!
- NC 403(b) Program Coming to Community Colleges this Summer!
Disability Recipients' Benefits Suspended
More than 165 disability benefit recipients have not returned their statement of income form to the Retirement Systems Division (RSD). Members receiving disability benefits are required to annually report their income to RSD in order to continue receiving monthly payments. RSD advised members to return the statement of income forms by April 1, 2016, to avoid having their benefits, including State Health Plan coverage, if applicable, suspended. State Health Plan coverage will not be retroactively reinstated. As a result, members may experience a lapse in health coverage which means that they may not have health coverage for a month or more.
RSD staff contacted these members by phone and by mail, but we have not received a response. Because these members have not yet returned the form, their benefit has been suspended, and they will not receive a payment for April. Please encourage any members affected by the suspension to send in their statement of income form as soon as possible, so that their benefits may be reinstated.
Annual Compensation Limits in 2016 for Retirement System Contributions
Federal and state laws impose an annual limit on the amount of compensation that a member can contribute to a qualified retirement plan. These limitations apply to the Teachers’ and State Employees’ Retirement System (TSERS), Local Governmental Employees’ Retirement System (LGERS), Consolidated Judicial Retirement System (CJRS), and Optional Retirement Program (ORP). The limitations may be adjusted from year-to-year according to Section 401(a)(17) of the Internal Revenue Code. The limitations for calendar (tax) year 2016 are as follows:
- For any member of TSERS, LGERS or CJRS who was hired prior to January 1, 1996, or an ORP member hired prior to July 1, 1996, the annual limit on compensation subject to retirement contributions in calendar (tax) year 2016 is $395,000.
- For any employee hired on and after January 1, 1996 who is a member or becomes a member of TSERS, LGERS, or CJRS, or an ORP member hired on or after July 1, 1996, the annual limit on compensation subject to retirement contributions in calendar (tax) year 2016 is $265,000.
Since an employee’s membership service is credited based on the months for which contributions are received by the retirement system, the employer needs to follow certain steps to ensure that a highly-compensated employee receives retirement credit for each month of service after exceeding the annual limit.
A general TSERS member should be reported through ORBIT Payroll Reporting under the STG plan code (or LOCG for a general LGERS member) from the beginning of the year to the month the member exceeds the annual limit.
- In the month after the member exceeds the limit, a general TSERS employee should be reported as STMAX (or LOCMAX for a general LGERS member).
- If the member exceeds the limit in the middle of a month, the monthly salary should be reported as two separate records, one under STG and one under STMAX for TSERS employees (or LOCG and LOCMAX for LGERS employees). The pay period for that month should also be split between the two plan code records.
- When reporting under STMAX or LOCMAX, the salary should be included but no contributions should be reported. Membership service credit is accrued under both of these plan codes.
If you have any questions regarding employer reporting, please contact our ORBIT Payroll Reporting Section by e-mail, or by phone at 1-877-627-3287 toll free.
Retirement Systems Approaching Peak Season for Retirement Processing
The months of June through August are the time of year when the N.C. Retirement Systems receives an increased number of retirement applications. We make every effort to process retirement applications as quickly as possible.
To facilitate timely application processing, members are encouraged to use the full 120 days available prior to their retirement date to sign and submit their Form 6, Claiming Your Monthly Retirement Benefit.
Upon receipt of the Form 6, the Retirement Systems will process and send additional forms to members to complete and return, including the Form 6E, Choosing Your Retirement Payment Option. Please remind your retiring employees that retirement benefits begin only after they have submitted a completed Form 6E.
Coming Soon: 2015 Annual Benefits Statements!
Public employees with more than 12 months of service will have their 2015 Annual Benefits Statement (ABS) posted to their ORBIT account in early May. The ABS is a unique, personalized snapshot of members’ projected sources of income in retirement.
It lists service in the NC Retirement Systems as of Dec. 31, 2015, estimated retirement benefits from members’ pension, estimated Social Security income, and contributions to the NC 401(k), NC 457 Plans, and the NC 403(b) Program. The statement also calculates any outside assets or pensions that members entered into the Retirement Income Calculator on the Prudential site. These combined assets will be calculated into the projected monthly income, too.
Staying current with your ORBIT Error Reports helps ensure that your employees will receive an Annual Benefits Statement each year.
NC 403(b) Program Coming to Community Colleges this Summer!
This summer, the nationally recognized NC 403(b) Program enters college! Starting in June, all community colleges across the state will be eligible to adopt this award-winning program, providing faculty and staff another resource to save and plan for a more secure retirement. It’s great timing, too, because the NC 403(b) Program is also introducing a new line-up of investment options, carefully selected by the Supplemental Retirement Board of Trustees.
The new fund line-up provides participants the option to create a diversified retirement portfolio that matches their unique retirement goals. And, for those participants who are may want assistance in choosing their own investments and allocations, the NC 403(b) Program is launching the Custom Portfolio Model Service. This service, provided at no additional charge, will be available June 3, and can help simplify retirement investing by recommending a single model portfolio based on each participant’s unique goals and risk tolerance. For more information on all these exciting enhancements, click on the link below to visit http://www.tiaa.com/nc403b.