Table of Contents
- Reminder for Employers with State Health Plan Members
- Sick Leave to Be Reported as Days Beginning in 2018
- Employer Reminders
- Correcting Employer Errors for the 2017 myNCRetirement Statement: The Time is Now!
- Annual Compensation Limits in 2018 for Retirement System Contributions
Reminder for Employers with State Health Plan Members
Please make sure your employees on the State Health Plan are aware of the following: 2018 health benefit premium amounts will be deducted from December paychecks or pension checks. This is a great time for your employees to make sure that all of their insurance elections (and credits) are properly deducted.
In addition, if Plan members made a plan change during Open Enrollment, they should receive a new ID card by mid-December.
Also, please be sure to inform any employees currently on the Consumer-Directed Health Plan (CDHP) that the CDHP is not a plan option for 2018, so Health Reimbursement Account funds should be used by December 31, 2017.
Sick Leave to Be Reported as Days Beginning in 2018
Legislation passed during the 2017 session requires that as of January 1, 2018, creditable service for unused sick leave be reported to the Retirement System in days instead of hours, a reporting change that standardizes the method. This new reporting total is what should now be sent to the Retirement Systems Division (RSD) on the Form 6, "Claiming Your Monthly Retirement Benefit."
The legislation specifically states that “days of sick leave standing to a member’s credit at retirement shall be determined by dividing the member's total hours of sick leave at retirement by the hours per month such leave was awarded under the employer’s duly adopted sick leave policy as the policy applied to the member when the leave was accrued.”
For example:
- If an employee has 640 hours of sick leave and accrues eight hours of sick leave each month, then the employer would do the following calculation: 640/8 = 80 days. The employer would report that this employee has 80 days of sick leave on the Form 6.
- If an employee has one thousand eight hundred twenty four hours of sick leave and accrues twenty four hours of sick leave each month, then the employer would do the following calculation: 1824/24 = 76 days. The employer would report that this employee has 76 days of sick leave on the Form 6.
- If an employee has accrued at different rates per month during their career and has 1,100 hours of sick leave then the employer would do the following calculations: 200 Hours accrued at a rate of 8 hours per month 200/8 = 25 days. 900 hours accrued at a rate of 12 hours per month 900/12 = 75 days. The employer would report that this employee has a total of 100 days (25 days + 75 days) of sick leave on the Form 6.
Please be sure to contact RSD at 877-NC-SECURE (877-627-3287) if you have any questions or are unsure of how to perform this calculation. It is very important that these figures be reported accurately to prevent the employee from initially receiving benefits to which they aren’t eligible and causing an overpayment they will ultimately have to pay back.
Please note that this change is a reporting requirement only and does not increase or decrease the amount of sick leave credited to a member.
As a reminder, a member’s unused sick leave may only be included in the retirement calculation, if under the Employer’s duly adopted sick leave policy the member is able to use the sick leave and be paid for the sick leave without restriction. Lump sum payments of sick leave should not be reported to RSD, nor should you include in the sick leave balance any sick leave for which the member has been paid. Also, unused sick leave may only be credited to the member's account at retirement if the member's last day of actual service is within one year for members of the Local Governmental Employees' Retirement System and five years for members of the Teachers' and State Employees' Retirement System.
Employer Reminders:
- The Retirement Systems Division strives to process member requests as timely and accurately as possible. Often additional information is needed to complete these requests which requires RSD to contact the employing agency’s HR or Payroll department. Please be sure to keep your agency’s contact information updated in ORBIT and respond to inquiries as timely as possible to avoid delays in the process.
- Several employers have commented that they do not answer the phone when they see a toll-free number displayed on their caller ID. Please note that RSD’s toll-free number – 877-627-3287 – will show up on your caller ID when a RSD staff member calls.
- Need to update the contact information for your agency? All you have to do is fax or email RSD with the updated information on agency letterhead to (919) 855-5001 or email the letterhead to OER@nctreasurer.com.
- Have an employee leaving? Updating ORBIT with the employee’s last day worked or the termination date will save you time. Otherwise, RSD will have to contact you to confirm these dates, which may delay the processing of your employee’s benefits.
- For employees nearing the end of their short-term disability period, please be sure to submit the appropriate forms to RSD. The forms needed are:
- 700- Required Employer Information
- 701- Application for Short-Term (if employer approved short-term benefits)
- 703 - Doctor Certification
- 711- Calculation Report and Payment Record
- 714 - Requesting Reimbursement and Service Credit for Short-Term period
If you need additional information about disability, click here.
Correcting Employer Errors for the 2017 myNCRetirement Statement: The Time is Now!
RSD is preparing to issue 2017 myNCRetirement Statements (formerly known as the Annual Benefits Statement) for active employees who contributed to their Retirement System account before December 31, 2017.
To help us generate accurate myNCRetirement Statements for your employees, please respond to your Employer Reporting Team representative promptly so that any issues can be addressed and necessary adjustments can be processed as soon as possible. As a reminder, employers now have access to their monthly ORBIT Error Reports on our website:
- Log into ORBIT as an employer
- Under the REPORTING options, select “Report Viewer”
- Select the “Employer Reporting” report type
- Select the “Detail Records in Error by Agency and Report Month – Self Service” report
- Select the “Report Month” and “Report Year.
- The “Exception Type” and “Source of Entry” are auto-populated and cannot be changed
- Select the Export Type which is either “Adobe PDF” or “Excel”
You can now check your monthly ORBIT errors as soon as your report has posted. You may save this report and add your responses on how to correct the Error Message, and then email the report to your ORBIT Employer Reporting Team representative. Your representative will correct these records in error status according to your written instructions.
All outstanding ORBIT reporting errors should be submitted no later than December 31, 2017. Failure to provide a timely response may result in either an incorrect, or missing, myNCRetirement Statement for your employees!
Not sure who your Employer Reporting Team representative is, or have other questions? Call 877-627-3287, and select option 3 from the main menu.
Annual Compensation Limits in 2018 for Retirement System Contributions
Federal and state laws impose an annual limit on the amount of compensation that a member can contribute to a retirement plan. For employees participating in and contributing to a 401(k), 457 or 403(b), the limit was increased by $500 to $18,500. The IRS issued technical guidance detailing the changes here.
These limitations also apply to several North Carolina pension plans: 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 2018 are as follows:
- For any member of TSERS, LGERS or CJRS who was hired before January 1, 1996, or an ORP member hired before July 1, 1996, the annual limit on compensation subject to retirement contributions is $405,000 for calendar (tax) year 2018.
- 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 is $275,000 for calendar (tax) year 2018.
Since an employee’s membership service is credited based on the months when 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.
| TSERS Member | LGERS Member |
|---|---|
| Should be reported through ORBIT Payroll Reporting under the STG plan code from the beginning of the year to the month the member exceeds the annual limit. | Should be reported through ORBIT Payroll Reporting under the LOCG plan code from the beginning of the year to the month the member exceeds the annual limit. |
| In the month after the member exceeds the limit, the employee should be reported as STMAX. | In the month after the member exceeds the limit, the employee should be reported as LOCMAX. |
| 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. The pay period for that month should also be split between the two plan code records. | If the member exceeds the limit in the middle of a month, the monthly salary should be reported as two separate records, one under LOCG and one under LOCMAX. The pay period for that month should also be split between the two plan code records. |
| When reporting under STMAX, the salary should be included but no contributions should be reported. Membership service credit is accrued under both of these plan codes. | When reporting under 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 the ORBIT Payroll Reporting Section by e-mail at OER@nctreasurer.com or by phone at 1-877-627-3287.