In this Issue:
Correcting Employer Errors for Annual Benefits Statements: The Time is Now!
The North Carolina Retirement Systems is preparing to issue 2016 Annual Benefits Statements for active employees who contributed to their Retirement System account as of December 31, 2016.
To help us generate accurate Annual Benefits Statements for your employees, please respond to your Employer Reporting Team representative promptly so that any issues can be addressed and necessary adjustments can be processed as soon as possible. As a reminder, employers now have access to their monthly ORBIT Error Reports on our self-service website.
You can now check your monthly ORBIT errors as soon as your report has posted. You may save this report and add your responses on how to correct the Error Message, and then email the report to your ORBIT Employer Reporting Team representative. Your representative will correct these records in error status according to your written instructions.
All outstanding ORBIT reporting errors should be submitted no later than December 31, 2016. Failure to provide a timely response may result in either an incorrect, or missing, Annual Benefits Statement.
Other Employer Reminders:
Treatment of Certain Teacher Bonus Pay as Non-Compensation for Retirement Purposes
The North Carolina General Assembly approved three teacher bonus pilot program provisions in the 2015 Appropriations Act modification bill (Session Law 2016-94; House Bill 1030), which took effect July 1, 2016. These pilot programs include: the Advanced Placement/International Baccalaureate Teacher Bonus Pilot Program, the Industry Certifications and Credentials Teacher Bonus Pilot Program, and the Third Grade Reading Teacher Performance Pilot Program. Teacher bonuses awarded under these programs during the 2015-2016 and 2016-2017 school years are payable in January 2017 and January 2018, respectively.
The law states that bonus pay awarded to teachers under the Third Grade Teacher Bonus, Advanced Placement Bonus, and the Industry Certifications and Credentials Teacher Bonus should not be treated as compensation for retirement purposes. Therefore, these payments should not be reported to the Retirement System as compensation.
Please contact the RSD Employer Reporting Section if you have questions regarding this matter or any other concerns.
Recap: October LGERS & TSERS Boards of Trustees Meeting
The Teachers’ and State Employees’ Retirement System (TSERS) and Local Governmental Employees’ Retirement System (LGERS) Boards of Trustees held their quarterly meeting on October 27, 2016.
At the meeting, both boards received an operations update from Retirement Systems Division staff and voted to accept actuarial valuation reports for each plan administered by each respective Board. Both Boards also adopted a policy for implementing the use of the Boards’ interception authority to collect delinquent employer contributions from participating agencies. Additionally, the TSERS Board considered and voted to deny a Petition for Rulemaking addressing the Contribution-Based Benefit Cap and the LGERS Board approved the participation of two new local employers in LGERS.
Board meeting materials (minutes, agenda, and other information) are accessible on the N.C. Department of State Treasurer website. The next meeting of the LGERS and TSERS Boards of Trustees is scheduled for January 19, 2017.
Both LGERS and TSERS are well funded compared to their peers. The funded ratio is a measure of the progress that has been made in funding the plans as of the valuation date and is the ratio of how much money each plan has in the fund to the amount each plan should have in the fund to pay out benefits. As reported in the most recent valuation reports to the Board of Trustees, TSERS is 92.5% fully funded and LGERS is 97.1% fully funded. North Carolina has one of the four best-funded public pensions in the nation.
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