|55 ELM STREET
TELEPHONE: (860) 702-3480
|MEDICAL EXAMINING BOARD
for DISABILITY RETIREMENT
|HEALTH CARE COST
|STATE OF CONNECTICUT
RETIREMENT AND BENEFIT SERVICES DIVISION
OFFICE OF THE STATE COMPTROLLER
RETIREMENT & BENEFIT SERVICES DIVISION MEMORANDUM
June 17, 2005
TO THE HEADS OF ALL STATE AGENCIES
|ATTENTION:||Personnel and Payroll Officers|
|SUBJECT:||State Employees Retirement System Retirement Plan Contributions|
I . INTRODUCTION
Pursuant to the provisions of Chapter 66 of the Connecticut General Statutes, as amended by the SEBAC V collective bargaining agreement effective July 1, 1997, mandatory retirement plan contributions required of members of the State Employees Retirement System (SERS) Tier I, Tier II hazardous duty and Tier IIA retirement plans are picked up by the employer under Internal Revenue Code, Section 414(h) on a pre-tax basis.
This change to the method of payment for mandatory retirement plan contributions was applied exclusively to those mandatory retirement plan contributions deducted from employees' earnings. Payment for the purchase of retirement credit or any other retroactive contribution payments made through the Comptroller's payroll system or through lump-sum payment directly to the Retirement & Benefit Services Division continued to be after tax contributions.
To fully comply with the Internal Revenue Service Code pertaining to the employer pick-up of mandatory employee retirement plan contributions, retroactive mandatory contribution payments due as a result of an error in an employees' retirement plan membership and coding must be deducted from their earnings on a pre-tax basis. Consequently, the Comptroller's Payroll Services Division at the request of the Retirement & Benefit Services Division will make all such payments through Core-CT payroll deductions.
This change applies exclusively to any mandatory retirement plan contributions that were not deducted from an employee's earnings in error; purchases of retirement credit payments will continue to be paid on a post-tax basis.
Effective immediately and for any outstanding SERS mandatory retirement plan contribution deficiencies that occurred in 2004, recovery of these contributions will be accomplished in an automated manner through Core-CT pre-tax payroll deductions. The Retirement & Benefit Services Division is currently in the process of creating an automated system to initiate and track such deductions. It is anticipated that this system will be in place and appropriate pre-tax deductions will begin in September 2005.
If an agency becomes aware of an error in an employee's retirement plan contribution deductions, they should take the necessary action to correct the employee's current payroll record and notify the Retirement & Benefit Services Division's Data Base Unit in writing at the address on this letterhead or by email at email@example.com of the error. This notification should include the check date with which the employee's payroll retirement contribution deductions have been corrected.
The Data Base Unit will verify the employee's retirement plan membership and contributions, notify the employee of the deficiency in their retirement plan contributions and initiate recovery of the those contributions through the Comptroller's Payroll Services Division. A copy of the employee's notification will be sent to the agency for their reference.
Agencies should not contact the Payroll Services Division regarding retirement plan contribution errors. The Retirement & Benefit Services Division must review all such errors and any adjustments to an employee's retirement plan contribution payroll deductions as a result will not be processed by the Payroll Services Division without authorization from the Retirement & Benefit Services Division.
SERS mandatory retirement plan contributions due in the amount of $20.00 or less will be taken from an employee's earnings through a one-time adjustment; mandatory retirement plan contributions due in an amount greater than $20.00 will be recovered in installments of $20.00 per payroll period until fully recovered.
If you have questions regarding employees' appropriate retirement plan membership or payroll retirement plan coding and contribution deduction amounts, you should contact the Data Base Unit at (860) 702-3515. However, please do not refer individual employees to this number.
Very truly yours,
STATE EMPLOYEES RETIREMENT COMMISSION
NANCY WYMAN, SECRETARY EX OFFICIO
Thomas C. Woodruff, Ph.D., Director
Retirement & Benefit Services Division
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