Retirement Monitor - February 2019

<p>In this issue:</p> <p>Board changes employer contribution rates for LGERS; 2016 myNCRetirement Statements available until March 29, 2019; &nbsp;Re-employment earnable allowance limits increased for 2019; Plan Sponsor website: Top five features; Kudos!​</p>

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Table of Contents

Board changes employer contribution rates for LGERS

Board elects smaller increases over next three years versus large increase in Fiscal Year 2022-2023

At its meeting on January 31, 2019, the Board of Trustees amended its policy for employer contribution rates to LGERS.

Effective July 1, 2019, the “base” employer contribution rate will change:

  • Law enforcement officers (LEOs) rate will increase from 8.50 to 9.70 percent of reported compensation.
  • Rate for all other employees will increase from 7.75 to 8.95 percent of reported compensation.

Additional rates, such as rates associated with death benefits or past service liabilities, will be added to the base rate to determine the actual contribution percentage for each employer. As in past years, each employer’s total contribution rate for the upcoming fiscal year will be calculated by the Retirement Systems Division and communicated in a letter before the end of April 2019. 

The Board’s policy now anticipates further increases in the “base” rates effective July 1, 2020, and July 1, 2021, equal to 1.20 percent of reported compensation each year, as follows:

Effective Date Non-LEO "Base Rate" LEO "BaseRate"
July 1, 2019 8.95% 9.70%
July 1, 2020 10.15% 10.90%
July 1, 2021 11.25% 12.10%

During the meeting, the Board was presented with several options and, with the support of local government association groups, chose this gradual increase over no action. The charts below highlight what the consulting actuaries project would happen in fiscal year 2022-2023 when the ECRSP expired. The black line represents what is projected if no policy adjustments were made, while the red line shows how this Board decision will gradually increase contribution rates. 
 

Graph wi the words Alternative Employer Contribution Rate Schedules for LEOs (Rate for Fiscal Year Ending June 30, Beginning July 1 of Prior Year)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Graph with Alternative Employer Contribution Rate Schedules for Non-LEOs (Rate for Fiscal Year Ending June 30, Beginning July 1 of Prior Year)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For more information on the history of this policy, click here. For the full presentation made to the Board of Trustees, click here.

Staff of the Retirement Systems Division are available to answer any questions from employers about this Board action.

2016 myNCRetirement statements available until March 29, 2019Image of the front page of the myNCRetirement Statement

The North Carolina Total Retirement Plans is preparing 2018 myNCRetirement Statements (formerly known as Annual Benefits Statements (ABS)) for active employees who contributed to the retirement system for a full year as of December 31, 2018.

In preparation for the new statements, 2016 statements will be permanently removed from ORBIT on March 29, 2019. Please remind your employees to view, download and/or print their 2016 myNCRetirement Statement if they have not yet done so, as copies of past statements are no longer available once removed from ORBIT. Any assistance you can provide to your employees who do not have access to a computer during their workday, such as a centrally-located computer work station or kiosk, is greatly appreciated.

Thank you for your continued support in the monthly reporting process. Your reports are critical to an accurate myNCRetirement Statement for your employees. The 2018 statements will be posted in ORBIT in April 2019, a month earlier than in past years! Resources, including a video which highlights statement features, a detailed users’ guide and FAQs, will be posted to www.MyNCRetirement.com in the coming month. Stay tuned for more information about this award-winning resource for your employees!

 

 

Re-employment earnable allowance limits increased for 2019

The Retirement Systems’ Boards of Trustees have increased the amount of compensation a re-employed retiree may earn in 2019. This change is for any retiree who has returned to work with an employer participating in the same retirement system from which the employee retired, but in a position that does not require retirement system membership. The increase, which became effective January 1, 2019, is equivalent to the 2.1 percent increase in the national Consumer Price Index (CPI) for the period from January 1 to December 31, 2018.

As provided under North Carolina law, the retiree’s retirement benefit will be suspended on the first day of the month after the month the retiree exceeds the limit for the remainder of the calendar year. For example, if a retiree exceeds the limit in July 2019, the retiree’s benefit will be suspended from August 1 through December 31, 2019.

For calendar year 2019, the earnable allowance limit is the greater of: 

  • 50 percent of the member’s compensation during the 12 months of service before retirement, excluding any termination payments, as increased by the equivalent CPI increase above the 2018 limit, or
  • $33,560

These earnings restrictions apply for the 12 months immediately following the effective date of retirement and for each calendar year following the year of retirement. Retirees should feel free to contact the Retirement Systems if they have questions about their earnable allowance.

Health coverage provided to retirees of the Teachers’ and State Employees’ Retirement System through the State Health Plan will also be suspended if the retiree’s retirement benefit is suspended. If the member’s benefit is suspended and later re-instated, his or her State Health Plan retiree group coverage will not be re-instated retroactively. As a result, the member may experience a lapse in health coverage, which means he or she may not have health coverage for a month or more.

 

 

 

Plan​ Sponsor Website: Top five featuresImage of Prudential Plan Sponsor Website log in screen

The Retirement Systems Division and Prudential are always looking for ways to assist you in your role as a participating employer in the North Carolina Supplemental Retirement Plans. We understand the sometimes complex nature of being an employer, so the plan sponsor website was created to support you. 

Whether you’re a seasoned professional or just coming into your role, this site has you covered. Here are the top five features of the plan sponsor website:

1: Payroll (and everything that comes with it)

The largest task you’re faced with as an employer is payroll. The payroll feature on the plan sponsor site can help you with a variety of tasks, including:

  • Payroll deduction (loan payments, pension and supplemental plan contributions)
  • Changes (loan start and stop or contribution rate changes)
  • Reporting
  • And more

2: Update and Maintain Information

As an employer, you’re no stranger to turnover. Luckily, the plan sponsor site makes it easy for you to maintain your employee database and, more importantly, note when there is a change in employment status. In addition, you can edit employee information, such as a change in address, last name or other personal information. The site makes it easy for you to keep all employee information up-to-date.

3: Statistics
The plan sponsor site is full of useful stats. It’s particularly helpful to know where you stand when it comes to the plans. How many employees do you have enrolled? In which plan do most of your funds lie? This feature allows you to check in, at your convenience, to assess your participation. 

4: Loan Start and Stop
An employee may need to take a loan out from his/her account, which is allowed. However, when this happens, it’s your responsibility, as the employer, to initiate the loan repayment immediately. The plan sponsor site notifies you when a loan payment needs to be started or stopped for your employees. Loan payments should be initiated as soon as you receive notification; otherwise, your employee’s loan could be defaulted and subject to penalties.

5: Report Analysis and Summary
Prudential has a suite of reports that must be routinely monitored on the “Action Required” page. We suggest reviewing all reports at least two days prior to the pay cycle to make the appropriate updates in time for upcoming payments. Within this section, you’re able to see your action items, schedule reports and create custom reports as needed.

The Retirement Systems Division and Prudential work diligently to make sure you have the tools you need to succeed as a participating employer in the plans. The plan sponsor site is an excellent place to reference or begin utilizing for the first time. If you have specific questions regarding the site features, you can email us or find your Retirement Education Counselor to learn more.

 

 

 

Kudos!

Kudos for February 2019

 

 

 

 

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