PERA: 2011 and Beyond · 2011. 4. 14. · 2010 Legislation Using current contribution rates Effective May 15, 2010 PERA contributions for all pay types are based on when the pay is

PERA: 2011 and Beyond

Mark LindnerCommunication Specialist March, 2011

Agenda

2010 Legislation Plans Eligibility Salary Education Opportunities

2010 Legislation Contribution Rate Increases effective

January 1, 2011 Coordinated Plan

Employee Rate: 6.25% Employer Rate: 7.25% (6.25% employer match +

1.00% Employer Additional Amount)

2010 Legislation Using current contribution rates Effective May 15, 2010 PERA contributions for

all pay types are based on when the pay is issued Includes regular pay, grievance pay, retroactive pay,

omitted deductions Prior to the law change, grievance pay and omitted

deductions were based on when the money was earned

2010 Legislation Budgetary Leaves Law change now allows employee to pay both

employee and employer contributions to maintain full salary for PERA purposes in cases of mandatory or agreed upon reductions in hours

2010 Legislation Compliance Review Process to evaluate the reporting practices of

employers Confirm that the statutes/laws of the pension plans are

understood and followed; Ensure that members receive the proper salary and

contributions to their accounts to determine future retirement benefits; and

Determine if we are providing the necessary information and resources for employers to report salary and contributions accurately.

2010 Legislation Compliance Review Questionnaire Evaluation/investigation by PERA staff Written report to employer

2010 Legislation Compliance Review Started as a pilot group of school districts as

PERA worked with TRA Pilot group has expanded; will be including non-

schools in the upcoming months Questionnaires will be sent randomly Receiving one does not imply the employer has

done something wrong; completing the questionnaire is mandatory, though

2010 Legislation Eligibility Vesting changes for Coordinated Plan employees

hired after June 30, 2010 is now five years Those hired prior to that day still have 3 year

vesting period

2011 Legislation

PERA is not planning on introducing legislation in 2011

Bills have been introduced that would alter/modify pension plan coverage– PERA does not support this potential

legislation

Eligibility

Defined Benefit Plan Mandatory participation for those who meet

eligibility requirements Be aware of exclusions as stated in Minnesota

Statutes Full list is in the PERA Employer Manual

(Chapter 3)

Eligibility

Defined Benefit Plan Conservative approach is to assume all new

hires are PERA eligible, until proven otherwise Assume you will need to withhold PERA

contributions Sometimes the person who holds the position generates

the exclusion Sometimes it is the position the person is in that creates

the exclusion

Eligibility

Defined Contribution Plan Optional plan for elected officials, physicians

in government employment, city managers/city administrators, ambulance service/rescue worker personnel

No minimum salary Employer cannot tell the employee he or she

can’t participate

Eligibility

Defined Contribution Plan Elected Officials

Must be elected by the public or appointed to fill what is normally an elected position

Can start and stop participation anytime while in office

Cannot take a withdrawal of funds until after out of office

Eligibility

Defined Contribution Plan Elected Officials

Governing Body Elected Officials – DCP is only choice (or no PERA plan)* School Board members are considered governing body elected

officials Governing body elected officials who enroll in the DCP do not

contribute to FICA, but do pay Medicare Those who do not join DCP, do contribute to FICA (and

Medicare)**

*Those elected prior to July 1, 2002 had option to enroll in Coordinated Plan if earnings exceeded $425 in any one calendar month.

**Law passed in 2006 allows dual coverage if modification to the State’s 218 Agreement with the Social Security Administration is completed.

Salary

Employers must understand that not all payments to employees are eligible for PERA contributions

PERA-eligible salary paid on a recurring/periodic basis for services performed as part of duties has a specific earnings period

Salary

PERA-eligible salary includes: Regular earnings Overtime Used vacation/sick/personal leave Voluntary reductions in salary

This list is not all-inclusive and other forms of pay may also be PERA-eligible salary

Salary

Salary that does not represent PERA-eligible earnings includes: Unused vacation time Employer contributions to deferred comp Money paid in lieu of health insurance

This list is not all-inclusive and other forms of pay may also be excluded

Salary

Refer to the Employer Manual for more information on eligible salary Re-organized manual now has Chapter 5

exclusively for earnings information Correctly reporting salary is one of most

important tasks from employers Knowing what is eligible and what is not critical Knowing to contact PERA is just as important

Education

►Employer Employer Training Seminars

►Spring, 2011►Schedule to come out in January/February►Register online

►Employee Individual conference Pre-retirement workshops Dollars and Sense Benefit fairs and other employer-sponsored events

Education

►Employee Individual conference

►Opportunity for member to meet with PERA benefit counselor 6 months to two years prior to retiring

►Meet for approximately 45 minutes to discuss upcoming retirement; paperwork required, benefit estimates, etc

►At PERA’s office in St Paul, Duluth or Mankato – or at various locations around the state as scheduled by PERA

Education

►Employee Pre-retirement Workshops

►For people getting ready to retire within five years of retiring

►Topics include PERA pension, Social Security and Medicare benefits, health insurance, financial and estate planning, and other retirement related issues

►Held in various locations throughout the year

Education

►Employee Dollars and Sense

►program for members in their 20s, 30s and 40s►designed to incorporate a number of interrelated

subjects—budgeting, investment and risk management, college savings, estate planning, financial planning, and, of course, your retirement and other benefits with PERA.

Education

►Employee Benefit Fairs

►Employers who want PERA to attend benefit fairs or other events sponsored by the employer (such as arranging a PERA to talk to a group of employees) should contact PERA (Linda Habel 651 355-0024 or [email protected])

PERA Resources

Employer Response Line 651 296-3636 1 888 892-7372

Member Services 651 296-7460 1 800 652-9026

www.mnpera.org PERAphrase newsletter