Due to the complexity of this legislation and the limited time frame between passage of the legislation and its effective date, the process will be implemented in stages. The legislation limits the amount of overtime that is considered pensionable and included in the base for calculating contributions.
As a first step, OSC has revised the Retirement Plan Table in PayServ for Plan Type “7X” (TRS) to include tier 5 as an option with a Benefit Plan of “TRSBT5” and a contribution rate of 3.5%. Any employee designated as tier 5 by the Teachers Retirement System must have this Benefit Plan selected.
Initially contributions will be calculated based on the definition of wages currently in effect for tiers 1 through 4. Until an employee exceeds the overtime ceiling of $15,000, there will be no difference in the calculation of the contribution using this approach.
A second step in this effort is to change the calculation base and methodology in PayServ. This will be implemented at a later date and an additional bulletin will be issued.