CalPERS Payroll and Membership Training
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This document provides an overview of CalPERS payroll and membership training for public agencies. It discusses CalPERS membership qualifications including time base, current membership status, and excluded positions. It covers enrollment timelines, reciprocal membership, and the definition of new versus classic members. The document also reviews the importance of correct and timely payroll reporting for calculating service credit and benefits. It discusses compensation earnable, special compensation, pensionable compensation, and reporting overtime pay correctly. Finally, it notes payroll deadlines, fees for late or inaccurate reporting, and resources for additional information.
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CalPERS Payroll and Membership Training
- 1. Public Agency Payroll CalPERS Payroll and Membership Training
- 2. Agenda • • • • Using the CalPERS Website Membership Payroll PEPRA
- 3. Employer Bulletin & Public Agency & School Reference Guide
- 4. Public Agency Reference Guide
- 5. Membership
- 6. CalPERS Membership Qualifications What is the time base of the appointment? Are they a current member of CalPERS? Is the position excluded from your contract?
- 7. Appointment Time Base and Tenure • Immediate Membership on Hire Date - Permanent Full Time on date of hire - Part-time, 20 hours per week, one year or longer - Temporary Full Time, in excess of 6 months - GC 20305
- 8. Current Member of CalPERS • Immediate Membership on Hire Date - Contributions or Service Credit on account - Once a member, always a member - GC 20305(a) (1)
- 9. Excluded Membership • Contract Exclusions • Independent Contractors • Notice of Exclusion (AESD-139)
- 10. Irregular Time Base – Monitored Positions Temporary Intermittent Substitute Emergency Seasonal On-Call
- 12. Definition of a New Member • Never been a member of any public retirement system • Moved between public retirement systems and had a six months break in service • Moved between public employers within the same retirement system and had a six month break in service • All schools are considered to be one employer
- 13. Definition of a Classic Member • Members who are not “new members” are a “classic members”. • Classic members will retain all existing benefit levels • Classic members will be tested against the “new member” definition upon each new appointment
- 14. Person Search
- 15. Person Search
- 16. Employer Responsibilities • Update my|CalPERS of any changes to employees’ employment status - Unpaid Leave of Absence - Permanent Separation - Address Change - Position Change
- 17. Appointment Updates - Employee Status
- 18. Timely Enrollment of Employees Into CalPERS • Employees must be enrolled within 90 days of qualifying for membership • If they are not enrolled in a timely manner it may result in you paying both member and employer contributions • Administrative fee of $500.00 plus both contributions with interest
- 19. Arrears Receivable Notice Report
- 20. Reciprocity
- 21. Member Reciprocal Self-Certification Form
- 22. Reciprocity
- 23. CalPERS or CalSTERS Right of Election School positions are divided into two basic types: • Certificated: An employee in a position requiring certification qualifications by or pursuant to the Education Code. Credentialed employees (e.g., teachers, administrators, health care, library media workers, etc.) are all in certificated positions. • Classified: An employee in a non-certificated position (e.g., office workers, custodial staff, cafeteria workers, etc.). Employees in certificated positions are eligible for membership in CalSTRS, while classified employees may be eligible for membership in CalPERS.
- 24. CalPERS or CalSTRS Right of Election
- 25. Payroll
- 26. The Importance of Correct & Timely Payroll Service Credit Benefit Factor Final Comp = Monthly Retirement Allowance Two of the three factors used in calculating your monthly Retirement allowance are from your payroll.
- 27. Inaccurate Payroll Reporting • If you report incorrect pay rates and earnings for your employees, you may cause: - Service credit accrual discrepancies - Delays in member retirement processing - Inaccurate retirement estimates - Incorrect payment of benefits - A delinquency fee for late payroll reporting
- 30. Special Compensation Categories - Classic Members
- 31. The Nine Criteria - Must meet all nine 1. 2. 3. 4. 5. 6. 7. 8. 9. Available to all members in a group or class Contained in a written labor policy or agreement Part of normally required duties Performed during normal hours of employment Paid periodically as earned Historically consistent with pay for the job classification Not paid exclusively in the final compensation period Not final settlement pay Not creating an unfunded liability over and above the CalPERS actuarial assumptions.
- 32. California Code of Regulations § 571(b)(1)
- 33. Pensionable Compensation New member’s pensionable compensation limited to: • Normal monthly rate of pay or base pay • Paid in cash to similarly situated members of the same group • Paid for Services Rendered during Normal Hours • Pursuant to a publicly available pay schedule • Excludes bonuses, overtime, pay for additional services outside of normal working hours and other types of pay • Retirement boards have the authority to exclude other forms of compensation inconsistent with the statutory definition
- 34. Incorrect Payroll Reporting Month July August September October November December January February March April May June TOTALS Pay Rate Member Earnings Service Credit Earned $0.00 $0.00 0.000 $0.00 $0.00 0.000 $2,600.00 $2,275.00 0.088 $2,600.00 $2,275.00 0.088 $2,600.00 $2,275.00 0.088 $2,600.00 $2,275.00 0.088 $2,600.00 $2,275.00 0.088 $2,600.00 $2,275.00 0.088 $2,600.00 $2,275.00 0.088 $2,600.00 $2,275.00 0.088 $2,600.00 $2,275.00 0.088 $2,600.00 $2,275.00 0.088 $26,000.00 $22,750.00 0.880 $26,000.00 ÷ 12 months = $2,167.00 incorrect final comp
- 35. Correct Payroll Reporting Month July August September October November December January February March April May June TOTALS Pay Rate $0.00 $2,600.00 $2,600.00 $2,600.00 $2,600.00 $2,600.00 $2,600.00 $2,600.00 $2,600.00 $2,600.00 $2,600.00 $2,600.00 $28,600.00 Member Earnings $0.00 $569.00 $2,275.00 $2,275.00 $2,275.00 $2,275.00 $2,275.00 $2,275.00 $2,275.00 $2,275.00 $2,275.00 $1,706.00 $22,750.00 Service Credit Earned 0.000 0.022 0.088 0.088 0.088 0.088 0.088 0.088 0.088 0.088 0.088 0.066 0.880 $28,600.00 ÷ 12 months = $2,383.00 correct final comp
- 36. Proper Reporting of Overtime Pay Rates Employees working less than 40 hours per week • Working overtime hours and paid overtime rates • Only Report the overtime hours up to 40 hours • Only report the “straight-time” rate • Only report the “straight-time” earnings • GC 20635.1
- 37. Payroll
- 38. Payroll
- 39. Retired Annuitant • Must report payroll, but no contributions, or service credit earned • Hourly pay rate, no benefits • Must not exceed 960 hours in a fiscal year • Performed for a limited duration, extra help • As of 1/1/2013 must have 6 month break in service • Independent Contractor vs. Retired Annuitant
- 41. Deadlines and Fees Administrative Fees and Interest Assessment - Gov. Code §20536, and 20537 - Regulations §565, 565.1- 565.5
- 42. Missing Payroll or Late Payroll Earned Period Reports – Due within 30 calendar days of reporting period • Administrative fee of $200.00 billed – Earned Period Report not submitted when due – Will be assessed monthly until payroll report submitted
- 43. Incomplete and /or Inaccurate Reports • my|CalPERS provides notice of errors – Errors in Employer’s staging area – $200.00 administrative fee assessed if errors not corrected and posted within 60 days of notice – Fee is billed monthly until entire payroll report is corrected and posted – Contracting Agency billed
- 44. Underpayment of Contributions Employer and Member • Within each Fiscal Year - - Payments of less than 90% when due, will be billed for underpayment to equal 100% Interest assessed if bill is not paid within 30 calendar days Interest receivable is interest bearing until paid Contracting Agency billed
- 45. Underpayment of Contributions Employer and Member • End of Fiscal Year – If pay <99% when due, billed for underpayment to 100% – Interest receivable is interest bearing until paid – Contracting Agency billed
- 46. Fee Waivers • Future Fee Waiver Request – Submit Request (Payroll Reporting Schedule page) – Each Request must be for one Earned Period Report – Future Fee Waiver requests for more that one Earned Period Report will be rejected – Legitimate reason for waiver (i.e., out of the Employer’s control)
- 48. Other Provisions • Prohibit the purchase of air-time - Additional Retirement Service Credit (ARSC) • Prohibit retroactive benefit increases - Excludes COLA’s Includes optional benefit provisions that are service based • Prohibit pension holidays - Requires the combined employer and employee contributions to cover the annual normal cost
- 49. Service Retirement Eligibility • Classic Members and all Safety Members - Age 50 with - 5 Years of Earned Service Credit • New Members - Age 50 Safety - Age 52 Miscellaneous - 5 Years of Earned Service Credit
- 50. Circulars • 200-055-12 released December 3, 2012 - Summary of General Provisions • 200-060-12 released December 11, 2012 - Benefits and Contributions for new school members • 200-062-12 released December 27, 2012 - Details of pensionable compensation items for new members • 200-063-12 released December 31, 2012 - Instructions for certifying impairment of MOU’s - Forms for Member self-certification of reciprocity • 200-002-13 released January 4, 2013 - Reporting Permanent Separation Dates and Validating Participant Appointment Details in my|CalPERS 50
- 51. Resources
- 52. Additional Employee Support • Beneficiary Designation Forms Call CalPERS Immediately • CalPERS Special Power of Attorney • Report an Imminent Death or Terminal Illness • Death of an Active Member (Complete PERS-BSD-738)
- 53. Resources • Public Employees’ Retirement Law (PERL) • Public Agency and School Reference Guide • • • • • • State Reference Guide Circular Letters CalPERS Employer Bulletin CalPERS Web site – www.calpers.ca.gov my|CalPERS Online Services, Calculators and Tools CalPERS Customer Contact Center (888-225-7377)
- 54. Social Networking • Follow us on Twitter: http://twitter.com/CalPERS • Find us on Facebook: http://facebook.com/myCalPERS • View videos on YouTube: http://youtube.com/CalPERSNetwork
- 55. Thank you for joining us today.
Editor's Notes
- The Forms and Publications Center is where you can go to review, download and/or print any forms, publications, circular letters and or resolutionsIn the area labeled “Employers”, you will also be able to access your reference guide.
- Membership Qualifications: This is another business related responsibility for employers….. Determining whether or not a person qualifies for membership is based on several different factors. Some positions are excluded from membership by law and some may be excluded by your agencies contract with CalPERS. Still others are optional and the employee may elect to become a member. Some positions require the employee to work a specific number of hours before becoming a member. Lets take a look some membership qualifications
- Under the “Person Information” tab you may search if a prospective employee is a member of CalPERS. You may use their existing CalPERS ID if known or their social security number.In the second panel labeled “anticipated or actual hire date”, you can enter a proposed hire date to complete your search.Select “continue”
- Once the potential “new hire” is queried…this screen will pop up next. The result will identify if the individual is in the my|CalPERS system.You will be provided some basic information to include:The individuals nameTheir membership status, you will see member yes or member noYou can also determine if they are vested in CalPERS with 5 years of Service CreditAnd if they are an optional member or retired?No results found will display if the individual is not in the system.
- It is also the responsibility of the employer to UPDATE my|CalPERS with any changes to an employees’ employment status; Unpaid Leave of Absence, Permanent Separation, Address Change or Position Change.
- When making an appointment change make sure you are filling in all fields with red asterisks.If are permanently separating a member, fill in the event field with that reason. If you need to place a member on leave, fill in the field with “begin leave”Types of leave - Educational , FMLA, Industrial Disability, Military, Mat/paternityNon industrial DL, Other leave, State disability, Service leave ,Sabbatical, Unpaid, Workers comp.When a member is permanently separated, document the number of unused sick leave hours this member had at the time of separation. If the wrong amount is input, the system will provide an error message.Error message: “The sick leave entered exceeds the average 8 hrs per month based on the employee’s total earned service credit. Incorrect reporting may cause an overpayment in retirement benefit”.
- CalPERS retirement benefits are funded by…Employer contributionsMember contributionsCalPERS Investment returnsIt is your responsibility to ensure your employees are enrolled and reportedaccurately and timely. Your payroll contains two of the three factors used in calculating your monthly retirement. Those two factors are…Service CreditFinal CompensationAt the time of retirement, the amount of the employees service credit will be multiplied by their benefit factor, that percentage is then multiplied by the Final Compensation, which is an average of the employees pay rate over a 12 or 36 consecutive month period.This will determine the amount of the total benefit they’ll receive as a retirement allowance. Some of the things that can occur if it isn’t reported timely or correct are…
- INACCURATE PAYROLL REPORTINGIf you report incorrect pay rates and earnings for your employees, you may cause:• Service credit accrual discrepancies• Service credit inaccuracies• Delays in member retirement processing• Inaccurate retirement estimates• Incorrect payment of benefits• A delinquency fee for late payroll reporting.
- To report compensation to CalPERS, the employer must ensure it meets the statutorily defined definitions found in the PERL.Compensation:• Funds controlled by the employer• Performed during normal working hours• Statutorily approved absencesCompensation earnable:Consists of payrate & special comp.Publicly available pay schedule-Approved by the governing body in a public meetingIdentifies every position, amount and time baseRetained for at least five yearsDoes not reference another documentSpecial comp.- Payments received for special skillsContained in written labor policy or agreementAvailable to a group or classReport as earned
- Pay rate is the amount of compensation a member is paid for a unit of time (i.e., hour, day or month) during normal working hours and must be listed on a publicly available pay schedule (CCR 570.5). The payrate must be available to everyone in a group or classThe pay rate should remain stable throughout a fiscal year except for pay raises, demotions, or changes of position. If a member works in more than one position or receives a raise in the middle of a pay period, report amounts earned under each pay rate separately.CalPERS considers full-time employment to range from 34 to 60 hours per week
- CCR 571 (b)(1) states that all items of special compensation must…duly approved in public meeting –Specifies condition of payment – so we know how much you are paying for that specific Special Comp.Immediately accessible – If requested by anyone, it is available at time of requestIndicates an effective and date of any revisions – Must clearly display an effective date along with any revision dates that may have occurredRetained for at least 5 years for public inspection – Longer would be better, but at minimum 5 yearsDoes not reference another document in lieu of disclosing the item
- Pensionable compensation of a new member of any public retirement system means the normal monthly rate of pay or base pay of the member paid in cash to similarly situated members of the same group or class of employment for services rendered on a full time basis during normal working hours, pursuant to publicly available pay schedulesMore info can be found in GC 7522.34
- EPMC may continue to be reported for classic members pursuant to existing PERL provisions. Agencies who wish to eliminate or reduce EPMC for classic members are able to do so under existing law through collective bargaining and contract amendments. Existing PERL statutes allow employers to periodically increase, reduce, or eliminate employer paid member contributions.To add Special Compensation, you must select the Blue link…”View Special Compensation”
- You will add or delete each special compensation type and amount to anemployee’s payroll record, an employee’s payroll record may contain multiplecategories and types of special compensation. Each special compensationitem should be separated into its own line item. Do not combine special compensation
- *Please pay attention as this is the 3rd class objectiveOne of the new items you must report are the hours for Retired Annuitants . When reporting Retired Annuitants please remember you Must report payroll, but no contributions, or service credit They will receive an Hourly pay rate, no benefitsThey Must not exceed 960 hours in a fiscal year Performed for a limited duration, extra help Part of the Pension Reform requires that as of 1/1/2013 there must be a 180 day break in service*Reporting them in your payroll is a new process, it allows us to track the number of hours they work. Currently we are not sending out notification to you the employer or the retired annuitant, so please track the hours as well, this should change.
- Some additional Payroll Information are Deadlines, Fees and Extension
- Earned Period Reports must be submitted by each Employer or before 30 calendar days after the end of the previous service period. If an Employer fails to submit their Earned Period Reports on time, CalPERS will assess an administrative fee of $200.00 for every Earned Period Report that is delinquent. The $200.00 administrative fee will be assessed every additional 30 calendar days until the late or missing Earned Period Report is submitted. Adjustment reports will not be subject to this part of administrative fees.
- Each Employer has 60 calendar days from the date the my|CalPERS system gives an errormessage on the payroll record. Any payroll error(s) remaining in the staging area uncorrectedafter 60 calendar days will generate a $200.00 administrative fee until all errors are corrected andposted. For each 30 day period after that, if the same error(s) continue to remain in the stagingarea and are not corrected, an additional $200.00 administrative fee will be assessed.
- WITHIN THE FISCAL YEARWithin the fiscal year, if an employer fails to pay at least 90% of contributions on time, CalPERS may assess interest on the amount outstanding from thedate the contributions were due to the date they were actually received. The interest rate used will be the “Actuarial Interest Rate” as defined in CaliforniaPublic Employees’ Retirement Law (PERL). When an Employer is assessed interest on underpayment of contributions, they will have 30 calendar days to submit payment. If payment is not made before 30 days, the assessed interest will be applied to the outstanding contribution balance displayed on the Billing and Payment Summary page of my|CalPERS.15 days - IRS
- At the end of the fiscal year, June 30, if an employer fails to pay at least 99% of the contributions by July 30, CalPERS may assess interest on the amountoutstanding. The interest rate used will be the “Actuarial Interest Rate” as defined in the PERL. The employer will have 30 calendar days to submitpayment. If payment is not made before 30 calendar days, the assessed interest will be applied to the outstanding contribution balance displayed on the Billing and Payment Summary page of my|CalPERS.
- CalPERS may, for good cause, grant an extension of time for the payment ofcontributions and/or the posting of each Earned Period Report. This is provided that the Business Partner sends a payroll schedule extension request for each Earned Period Report via my|CalPERS Payroll Schedule page at least 10 working days before the due date. Each payroll extension request must be for one Earned Period Report at a time. An extension request covering multiple Earned Period Reports will be rejected. CalPERS may waive assessed fees upon satisfactory proof of conditions existing beyond the Business Partner’s control. Normally, CalPERS does not consider internal procedures or payment processes used by an Employer as acceptable justification for incomplete or erroneous reporting and/or underpayment of contributions. Requests to waive assessed fees should be submitted via my|CalPERS.
- Retirement benefits and calculationsHow to perform retirement calculation What is included in the retirement calculationService credit purchases
- ARSC No back dating benefitsER still need to pay contributions unless they are over 120%
- For the majority of CalPERS Members, the most common form of retirement is Service Retirement. The eligibility will be different for our classic vs new members
- Beneficiary Designation If a member passes away before retirement, their wishes are determined by using the BSD 241. This form allows the member to designate beneficiaries other than the statutory beneficiaries provided by retirement law. Please provide it to all your employees upon entering CalPERS. Please note that a life event will revoke previous designations and the member should complete a new beneficiary form. Life events include marriage, divorce, registration or termination of Domestic Partnership and birth or adoption of a child.CalPERS Special Power of Attorney CalPERS has a special durable power of attorney form for use by members and beneficiaries. This special power of attorney enables you to appoint another person to speak with CalPERS on your behalf. This person may obtain information about your benefits, select a retirement option, change your mailing address, sign tax withholding forms, and conduct other retirement business on your behalf. Please provide to all your employees upon entering CalPERS. Reporting an Imminent Death or Terminal Illness If you become aware of an employee’s terminal illness or imminent death , immediately contact CalPERS. Imminent death or terminal illness implies that the member is not expected to live more than 90 days. This also applies to cases where death may not necessarily be imminent, but competency to act on one’s own behalf may become impaired thereby jeopardizing later desired retirement action. A CalPERS representative will meet with the member in their home or hospital room to assist in completing a retirement application if the member is unable to visit their local Regional Office. Death of an Active Member Upon learning of an employee’s death, immediately contact CalPERS we will assist the family.
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- Along with the many ways you can contact CalPERS, a great way of keeping up on the latest information is the use of social networking. You can now Follow us on Twitter and you can Like us at Facebook.You can also find great informational videos by going to the Video Center on our website. All of our video content is published to the CalPERS YouTube channel. On YouTube, you can subscribe to our videos, share them, and embed them in your own sites.