- Why is TRS not allowing the acceleration of contributions to be withheld and remitted to TRS?
One of the goals of this new reporting method is to be able to validate data at the time it is reported. By not allowing acceleration of TRS contributions, TRS is able to validate the 9% contribution on an individual basis and will enable employers to reconcile more frequently. This will allow for consistency in reporting for all members.
- How will the TRS mandate regarding the acceleration of contributions affect employers for whom the acceleration of contribution withholding is collectively bargained?
TRS has updated Section 1650 of the Administrative Code to not allow for the acceleration of TRS contributions. This rule takes precedence over any collective bargaining agreement.
- Will I need to stop accelerating contribution beginning with the 2020-21 school year?
Yes, beginning with earnings for the 2020-21 school year, you will be required to remit the exact amount of contributions due each pay period/month. For earnings paid in July 2020 and future months for earnings earned in 2020-21, the correct contribution rate will be remitted each pay period/month.
- If districts are not able to accelerate the contributions, but all contributions are still required to be submitted by July 10th, is the district required to pay the upcoming deductions or benefits for July and August before they are collected through payroll?
As always, all the contributions for each fiscal year are due to TRS by July 10th. To allow employers to remit the appropriate contributions to TRS by this deadline, they should report all their payrolls that will cover the work performed during the fiscal year at the end of June/beginning of July using the deferred flag, even if they will not be paying their members until July or August. This can be achieved several different ways.
A. Run all checks at the end of June/beginning of July to ensure the contributions are remitted by the deadline and the earnings are reported as deferred on the pay-period report. The checks can be held and paid in July and August or paid to the teachers in June.
B. Do not pay the teachers the earnings until July and August as you always have, but report as deferred earnings the pays that will be paid in the summer months on the payroll report that is due July 10th. However, in this case the district would need to pay the contributions from district funds to ensure all contributions are received by the due date and not remit to TRS the contributions when they are withheld from the teachers’ remaining checks.
C. Pay all teachers over 10 months so that all salary is paid out by the end of June instead of over 12 months.
Member contributions will be balanced with each report to make sure that TRS has received no more or less than the applicable member contribution rate of the reported creditable earnings.
- How do we report earnings if our district pays the employee 9% contribution on the employee’s behalf?
When a district pays a member’s TRS contributions, the board-paid contributions are reportable as creditable earnings and should be included in the earnings reported on the payroll file. On the payroll file, the earnings are broken out by payment reason instead of being reported as one number as it is currently on the Annual Report.
The district pays the full 9 percent retirement contributions on all earnings. A member has a base salary of $50,000/24 = $2,083.33 and is paid $750 for a coaching stipend in a one pay period.
The amount report as base earnings (BS) would be 2,289.37 ($2,083.33 x 1.098901) and extra duty (ED) of 824.18 ($750 x 1.098901).
- Are employer match contributions to the new DC (Deferred Compensation) plan reportable as creditable earnings?
Employer contributions on behalf of a member to the DC plan are reportable as creditable earnings following TRS’s lump-sum rules.