Retirement Monitor - December 2019

<p>In this issue:</p> <p>Statement of Income Forms to be Mailed to Disability Benefit Recipients February 2020;&nbsp;Promote Employee Engagement;&nbsp;Accounting Bulletins -&nbsp;Correct ORBIT Employer Errors Now,&nbsp; Reporting Names Correctly, Annual Limits in 2020 for Retirement System Compensation;&nbsp;Fee Holiday Extension;&nbsp;Upcoming Employer Training and Total Retirement Planning Conferences; Employer Adoption Agreements; Kudos</p>

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Table of Contents

 

 Statement of Income Forms to be Mailed to Disability Benefit Recipients February 2020

The Retirement Systems Division (RSD) will mail approximately 10,000 Statement of Income (SOI) forms in February 2020 to disability benefit recipients. North Carolina law requires each disability benefit recipient to report earnings from employment and benefits from certain other sources each year to RSD. 

Any benefit recipient failing to respond by April 15, 2020, may have his/her monthly disability benefit suspended. If the monthly benefit is suspended, any State Health Plan health coverage the benefit recipient was receiving will also be suspended. If the benefit is suspended, and we later receive the required information, the monthly benefit may be re-instated retroactively; however, the State Health Plan coverage, if applicable, will not be re-instated retroactively. As a result, a benefit recipient may experience a lapse in health coverage for a month or more.

Please inform any employees you have who are receiving disability benefits to be on the lookout for this Statement of Income form and emphasize the importance of completing and returning that form.

Graphic showing a screenshot of the Prudential supplemental website with the words Promote Employee Engagement

 

If you are one of the more than 1,100 employers across the state that offer the 401(k) Plan, 457 Plan or the 403(b) Program as a benefit to your employees, the participant website offers many ways to promote employee engagement. The site is more than an account summary. Once logged in, a participant has access to Retirement Income Calculators, Debt Management, Budgeting Widget, and a variety of educational videos. The My Retirement Statement (MRS) is also a resource in planning for retirement, giving a personalized snapshot of service, pension benefits, supplemental savings, beneficiaries and more. Being engaged in retirement planning and thinking about the future is a positive step in making sure your employees are on the path to achieving their retirement goals.

A graphic showing tools available to employees on Prudential's website

 

 

It's all in a day's work graphicREMINDER: Correcting ORBIT Employer Errors - The Time is Now!

The Retirement Systems Division is preparing to issue 2019 myNCRetirement Statements for active employees who contributed to their retirement system account before December 31, 2019.

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: 

  1. Log into ORBIT as an employer
  2. Under the REPORTING options, select “Report Viewer”
  3. Select the “Employer Reporting” report type
  4. Select the “Detail Records in Error by Agency and Report Month – Self Service” report
  5. Select the “Report Month” and “Report Year.
  6. The “Exception Type” and “Source of Entry” are auto-populated and cannot be changed
  7. 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 response 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 error responses should be submitted no later than December 31, 2019. If you fail to provide a timely response, then your employees may receive an incorrect myNCRetirement Statement, or they may not receive one at all!

If you ar not sure who your Employer Reporting Team representative is, or you have other question, please call us at 877-627-3287, and select option 4 from the main menu.

Reporting Names Correctly

If your employee’s name is not reported correctly, the payroll record will go into error status.  

  • Always report the name as it appears on the employee's Social Security card.
  • Always list name segments in the appropriate field. Each of the following have their own field:
    • First Name
    • Middle Name
    • Last Name
    • Suffix

Annual Limits in 2020 for Retirement System Compensation

Federal and state legal limitations on annual compensation for employees in pension plans apply to several North Carolina retirement plans, including 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 2020 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 $425,000 for calendar (tax) year 2020.
  • 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 $285,000 for calendar (tax) year 2020.

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.

Reporting TSERS Members:

  • 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.
  • In the month after the member exceeds the limit, the employee should be reported as STMAX.
  • 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.
  • When reporting under STMAX, the salary should be included but no contributions should be reported. Membership service credit is accrued under both plan codes.

Reporting LGERS Members:

  • 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 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 LOCG and one under LOCMAX. The pay period for that month should also be split between the two plan code records.
  • When reporting under LOCMAX, the salary should be included but no contributions should be reported. Membership service credit is accrued under both plan codes.

Reporting ORP Members:

  • Should be reported through ORBIT Payroll Reporting under the ORPG 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 ORPMAX.
  • If the member exceeds the limit in the middle of a month, the monthly salary should be reported as two separate records, one under ORPG and one under ORPMAX. The pay period for that month should also be split between the two plan code records.
  • When reporting under ORPMAX, the salary should be included but no contributions should be reported. Membership service credit is accrued under both 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.

 

 

Graphic with the 401(k)/NC457 logo with 2020 "Fee Holiday" extension saves members more than $2 million in text 

Treasurer Folwell and the North Carolina Supplemental Retirement Plans Board of Trustees unanimously approved the extension of the 2019 Administrative Fee Holiday through 2020 at their board meeting today. This fee holiday, which covers the administrative fee charged by the department and the board, amounts to a total savings of more than $2 million for participants in the NC 401(k) and NC 457 Plans. That follows a $2 million fee reduction in 2019.

“Everything we do in this department is for the customer — those that teach, protect and serve," Treasurer Folwell said. “We are committed to driving down costs, reducing complexity and increasing the value of these plans for our hard-working teachers, troopers and other public employees."

Read more

 

Upcoming Employer Training and Total Retirement Planning Conferences

On January 8, 2020, the Retirement Systems will hold a comprehensive employer payroll reporting seminar for Integrated HR-Payroll System (formerly BEACON) and Local Government employers at our Raleigh office AND online through GoToWebinar. In-person attendance is limited to 25. In addition to the ORBIT payroll topics, we are including new information about employers’ responsibilities for those employers who have employees enrolled in the NC 401(k), NC 457 or NC 403(b).

To attend onsite register here

To attend through GoToWebinar register here

Graphic announcing a total retirement planning conference in Charlotte on April 2, 2020 (Click on the graphic above for information about the Charlotte event.)

The Retirement Systems has several other Retirement Planning Conferences planned for next year. Click here for the list or click here to view on a calendar.
 

Kudos!

Kudos to Hobgood Charter School, the Town of Harrisburg and the City of Lexington

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