Retirement Monitor - June 2023

Local Governmental Employees' Retirement System Rates Effective 7/1/23; Information Regarding TSERS Employer Contribution Rates for Fiscal Year Beginning July 1, 2023; Timely and Accurate Employer Reporting; Employer-Implemented New Systems and Testing; Update: Employer NC 401(k) and NC 457 Plans' Employer Platform Migration; Employer and Member Webinars; Prepare for 2024 Open Enrollment with HBR Training

Table of Contents

 

Local Governmental Employees' Retirement System Rates Effective 7/1/23

LGERS employer contribution rates effective July 1, 2023, are posted to the Retirement Systems’ website.

The rates are posted publicly rather than mailing individual letters to every employer to improve efficiency and transparency and reduce costs. The table is ordered by five-digit employer code but is also searchable (by employer name) within a browser, or by downloading the PDF and using “Edit”->”Find” in Adobe.

The specific rate(s) paid by each employing unit will include the “base rate” from the table above, and other adjustments that are specific to the unit.

Information Regarding TSERS Employer Contribution Rates for Fiscal Year Beginning July 1, 2023

For employee service rendered through June 30, 2023 (required to be submitted by early July 2023), the TSERS employer contribution rates are as specified in Section 39.19 of S.L. 2022-74. These contribution rates totaled 24.50% of compensation for general employees, and 29.50% for law enforcement officers (LEOs). They included employer contributions toward retirement, retiree health, disability, and death benefits, as well as contributions to the N.C. 401(k) Plan for LEOs. They did not include the employee contribution of 6% of compensation.
For employee service rendered on or after July 1, 2023, the employer contribution rate will depend on the status of a Current Operations Appropriations Act for the fiscal biennium from July 1, 2023 to June 30, 2025 (“2023-2025 Budget”).

If the 2023-2025 Budget becomes law by the time an employer is required to submit contributions, the employer contribution rates will be as specified in that law.

If the 2023-2025 Budget has not become law by the time an employer is required to submit contributions, the employer contribution rates for that submission will be equal to the recurring funds portions of the rates that were in effect on June 30, 2023. These rates would total 22.94% of compensation for general employees, and 27.94% for State LEOs. The components of the rates would be 16.09% for retirement, 0.10% for the Disability Income Plan of North Carolina, 0.13% for active employee death benefits, 6.62% for retiree health benefits, and 5.00% (LEO compensation only) for 401(k) contributions. As always, different contribution rates would apply for members of the UNC Optional Retirement Program, Consolidated Judicial Retirement System, and Legislative Retirement System.

If the 2023-2025 Budget becomes law after an employer is required to submit contributions, and has a retroactive effective date of July 1, 2023, the Retirement Systems Division (RSD) will create retroactive rate adjustment invoices for any contributions that have already been submitted with respect to employee service rendered on or after July 1, 2023, where it is feasible to do so. Such invoices may be positive (requiring additional contributions) or negative (providing credits against future required contributions), depending on the contribution rates set in the 2023-2025 Budget relative to the rates already paid.

For example, suppose an employer has already reported on employee service for July 2023 and paid retirement contributions of 16.09% of compensation (the recurring-funds retirement component of the 22.94% total contribution in effect as of June 30, 2023), and the 2023-2025 Budget retroactively requires a contribution at the rate of 17.00% for retirement. Where it is feasible to do so, RSD will create a retroactive rate adjustment invoice for the remaining 0.91% of the compensation that the employer had reported for that pay period. Any additional contributions required from a retroactive rate change will be due by the regular contribution deadline for the payroll period during which the invoice is issued.

Depending on the ultimate timing and details of the 2023-2025 Budget, it may be necessary for RSD to implement retroactive changes through processes other than, or in addition to, issuing retroactive rate adjustment invoices. For example, in 2021, a different process was used after the budget law was enacted in November 2021. RSD will provide additional guidance to employers as needed.

 

 

 Timely and Accurate Employer Reporting

Employee and Employer contributions are due via the monthly Contribution Summary Instructions (CSI) by 5:00 p.m. on the 5th business day of the month along with the Monthly ORBIT payroll report. If the 5th falls on a weekend, contributions are due the following business day by 5 p.m. This schedule has been updated to include 2023 dates and is located on our website

myNCRetirement Tip:  Create a calendar reminder so you meet the required deadlines. 

 

 

⭐Employer-Implemented New Systems and Testing

Are you updating or implementing a new payroll system? Once you have finalized writing your business requirements and the new system is in place, the Retirement Systems Division is here to help with testing. If you intend to use a vendor for your system changes, you should still plan on being part of that process as the key contact for reporting.

We request that you notify us as soon as possible if you are making a change or upgrade so we can schedule testing that aligns with your planned start date. You should expect testing to take at least 90 days.

 

Update: NC 401(k) and NC 457 Plans’ Empower Platform Migration  

The NC 401(k) and NC 457 Plans (the Plans) are targeted to migrate to a new recordkeeping platform at Empower in February 2024. You will continue to receive email communications about this important change with helpful resources from Empower, including:

  • “What to Expect with Your Migration” Webinar: Learn about important dates to have on your radar, as well as the main areas where your action will be required. Register for a replay of this important webinar. Registration information can be found here.
  • Migration Checklist: For a monthly summary of the migration process, including your responsibilities as a participating employer, refer to the migration checklist
  • Migration Website: More information about the benefits of the migration, what will change, helpful videos and updated resources, can be found on the dedicated migration website.       
     

Please continue to pay special attention to the communications and resources that will guide you through each step of the process. Have questions? Your dedicated Empower Retirement Education Counselor is available to provide support; click here to find your counselor and their contact information.

Thank you for your continued partnership throughout the migration.

Reminder: Changes for Long-Term Part-Time Employees

The SECURE Act and SECURE 2.0 Act make important changes to retirement plan coverage and affect the NC Supplemental Retirement Plans (NC 401(k) Plan and NC 457 Plan). 

The SECURE Act, enacted in December 2019, expanded 401(k) plan eligibility for part-time workers. Part-time employees who work at least 500 hours per year for three consecutive years, starting on January 1, 2021, are eligible to participate in the NC 401(k) Plan. Beginning January 1, 2024, participating employers will be responsible for notifying the NC 401(k) Plan of eligible part-time employees. Employers will notify the Plan through the Plan Sponsor Website, which is the same method used now for notifying the Plan of employees’ eligibility. Eligible part-time employees will be permitted to make employee contributions to the NC 401(k) Plan (i.e., deferrals from their compensation), but employers are not required to make employer contributions to these newly eligible part-time employees. 

The SECURE 2.0 Act, enacted in December 2022, further expanded eligibility for part-time employees. Beginning in 2025, part-time employees who have worked two consecutive years and completed at least 500 hours of service each year will be eligible to enroll in the NC 401(k) Plan.  

We will continue to provide additional information on the implementation of these requirements. If you have specific questions about implementing these changes for your employees, you can reach out to the NC Plans Service Team by calling 866NCPlans (866-627-5267), or by email at NCPlans@empower.com. You can also get in touch with your dedicated Empower Retirement Education Counselor; click here to find your counselor and their contact information. 
 

 

Virtual and on-demand training options help you understand employer roles, responsibilities and assist employees with retirement related matters. Employer Training is available throughout the year.

There are ongoing retirement planning and information sessions available for new members, mid-career and those nearing retirement. We encourage member participation so they can learn about their benefits and plan for their financial future. 

Employer Webinars

MyNCRetirement Employer Training Webinars

Empower Retirement Benefits Webinars

Member Webinars

Retirement Planning Webinars

Empower Retirement Benefits Webinars

 

Prepare for 2024 Open Enrollment with HBR Training

Let us help you get ready for 2024 Open Enrollment! The State Health Plan is holding Open Enrollment trainings for HBRs in July. Open Enrollment trainings cover important information regarding 2024. These trainings will be offered as webinars, so you may join us from the comfort of your own desk.

This year, Open Enrollment will be held October 9-27, 2023. Reserve your spot to ensure you have the information you need to best serve your employees! Click below to register for the one that best fits your schedule.

Open Enrollment HBR Trainings Dates/Times:

The Plan will also begin to focus on Open Enrollment during the HBR monthly webinars in addition to other important announcements. To register for the monthly HBR webinars, visit the Plan’s website.

 

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