In this Issue:
Disability Recipients' Benefits Suspended
More than 165 disability benefit recipients have not returned their statement of income form to the Retirement Systems Division (RSD). Members receiving disability benefits are required to annually report their income to RSD in order to continue receiving monthly payments. RSD advised members to return the statement of income forms by April 1, 2016, to avoid having their benefits, including State Health Plan coverage, if applicable, suspended. State Health Plan coverage will not be retroactively reinstated. As a result, members may experience a lapse in health coverage which means that they may not have health coverage for a month or more.
RSD staff contacted these members by phone and by mail, but we have not received a response. Because these members have not yet returned the form, their benefit has been suspended, and they will not receive a payment for April. Please encourage any members affected by the suspension to send in their statement of income form as soon as possible, so that their benefits may be reinstated.
Annual Compensation Limits in 2016 for Retirement System Contributions
Federal and state laws impose an annual limit on the amount of compensation that a member can contribute to a qualified retirement plan. These limitations apply to the Teachers’ and State Employees’ Retirement System (TSERS), Local Governmental Employees’ Retirement System (LGERS), Consolidated Judicial Retirement System (CJRS), and Optional Retirement Program (ORP). The limitations may be adjusted from year-to-year according to Section 401(a)(17) of the Internal Revenue Code. The limitations for calendar (tax) year 2016 are as follows:
Since an employee’s membership service is credited based on the months for which contributions are received by the retirement system, the employer needs to follow certain steps to ensure that a highly-compensated employee receives retirement credit for each month of service after exceeding the annual limit.
A general TSERS member should be reported through ORBIT Payroll Reporting under the STG plan code (or LOCG for a general LGERS member) from the beginning of the year to the month the member exceeds the annual limit.
If you have any questions regarding employer reporting, please contact our ORBIT Payroll Reporting Section by e-mail (click on the link below), or by phone at 1-877-627-3287 toll free.
Retirement Systems Approaching Peak Season for Retirement Processing
The months of June through August are the time of year when the N.C. Retirement Systems receives an increased number of retirement applications. We make every effort to process retirement applications as quickly as possible.
To facilitate timely application processing, members are encouraged to use the full 120 days available prior to their retirement date to sign and submit their Form 6, Claiming Your Monthly Retirement Benefit.
Upon receipt of the Form 6, the Retirement Systems will process and send additional forms to members to complete and return, including the Form 6E, Choosing Your Retirement Payment Option. Please remind your retiring employees that retirement benefits begin only after they have submitted a completed Form 6E.
Coming Soon: 2015 Annual Benefits Statements!
Public employees with more than 12 months of service will have their 2015 Annual Benefits Statement (ABS) posted to their ORBIT account in early May. The ABS is a unique, personalized snapshot of members’ projected sources of income in retirement.
It lists service in the NC Retirement Systems as of Dec. 31, 2015, estimated retirement benefits from members’ pension, estimated Social Security income, and contributions to the NC 401(k), NC 457 Plans, and the NC 403(b) Program. The statement also calculates any outside assets or pensions that members entered into the Retirement Income Calculator on the Prudential site. These combined assets will be calculated into the projected monthly income, too.
Staying current with your ORBIT Error Reports helps ensure that your employees will receive an Annual Benefits Statement each year.
NC 403(b) Program Coming to Community Colleges this Summer!
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