Retirement Monitor - September 2021

The State and Local Government Finance Division put out some information on handling bonuses and incentives to employees to encourage COVID-19 vaccinations. Here are two key points:

• Are these incentives taxable to employees? We believe they are and should be paid through payroll so that they are subject to the appropriate withholdings and reporting. We are watching for clarification from the IRS on this issue.
  
   
• Are these incentives reportable to LGERS? We believe they are not, as they do not represent compensation that is earned in exchange for service as an employee. In addition, if the incentives are not compensation for LGERS, then they will not be compensation for contributions to the NC 401(k) and NC 457 Plans.

Read more here: NC Treasurer: Paying Bonuses or Incentives to Employees to Encourage Vaccination

Has Your Agency had Changes to Your Banking?

The new Form 717 will ensure security, efficiency, and consistency for Agency Banking changes by collecting the same information from each Agency on an easy-to-complete notarized form. Upon receipt, the form will be processed and will result in an acknowledgement letter to confirm the changes to the Agency.  The new Form 717-Employer Bank Change Request Form is now available.

Please note that this form requires a notary signature and should be completed by an official agency contact on record with the NC Retirement Systems.

Automating the Payroll Reporting Process

We will no longer include screenshots of errors on payroll rejection reports. These will go out 'as is' beginning with the September 2021 payroll report.

Please share this information with your payroll vendor or IT Department as the employer will be responsible for:

• finding errors,
• correcting reports, and
• resubmitting reports.

This is to prepare employers for the automation of this process.​

Local Government 1,000 Hour Rule Reminder

North Carolina Retirement Systems law requires an employee to become a contributing member of the Local Governmental Employees’ Retirement System (LGERS), if the employee is employed by a participating LGERS employer in a regular position that requires at least 1,000 hours of work in a calendar year. The employee will not be a contributing member of LGERS if his or her work is considered “temporary employment,” meaning employment for a limited term which does not exceed 12 consecutive months on a non-recurring basis for an LGERS employer, or “statutorily required interim employment,” meaning employment as an interim city or county manager for a period that does not exceed 12 months on a non-recurring basis.

To determine if an employee is required to be an LGERS member and if contributions must be submitted to LGERS on his or her behalf, examine the requirements of the position. The hours required of the position determine membership in LGERS, not the actual number of hours an LGERS employee works in a calendar year.

Employer Requirements for Return-to-Work

Effective in 2009, the General Assembly authorized House Bill 642, requiring employers to report all rehired retirees to the Retirement System each month. To assist employers in reporting all rehired retirees and therefore avoiding penalties, the Retirement System offers an online user-friendly procedure to certify employee status under the retirement reemployment laws. To use this tool, you should:

1. Access the ORBIT Employer Self-Service page.
2. Under “Reporting” click “Check Retired Status.”
3. Here you are able to upload a list of employee social security numbers which will be run against the Retirement System retiree list to generate a report of members who are actively receiving a benefit from TSERS or LGERS.

Important Points to Remember:

• Rehired retirees should be reported in ORBIT monthly.
• Reports should include the appropriate pay period, pay type, plan code and all other applicable fields.
• Reports must be received by the Retirement System within 90 days of the end of each month in which a beneficiary is reemployed, otherwise the Retirement System is required to assess a 10% penalty of the compensation of the unreported reemployed retirees during the months the employer did not report the reemployed retirees, with a minimum penalty of $25.

The Retirement Systems appreciate your important role in helping us provide accurate information to active members and retirees.