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Date: October 15, 2013

Bulletin Number: 1275

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Subject

New Deduction Code 616 PAF Retirement Before Tax (PAF BTX) and new Deduction Code 618 PAF Arrears Before Tax (PAF ARBTX)

Purpose

To notify agencies of the new deduction codes 616 PAF Retirement Before Tax (PAF BTX) and 618 PAF Arrears Before Tax (PAF ARBTX) established for members of the New York State Police and Fireman Retirement System (PFRS). 

Affected Employees

Members of PFRS in Tiers 3, 5 and 6.

Background An Internal Revenue Service (IRS) ruling dated July 9, 2013 states mandatory contributions made by PFRS members in Tier 3, 5 and 6 be deducted from their earnings before the calculation of Federal taxes.  

Effective October 1, 2013, the mandatory contributions made by Tier 3, 5 and 6 PFRS members will be tax deferred for Federal income tax purposes under Internal Revenue Code Section 414(h). 

Effective Date(s)

Institution pay checks dated October 17, 2013.
Administration pay checks dated October 23, 2013.

OSC Actions

OSC has created new deduction codes 616 PAF Retirement Before Tax (PAF BTX) and 618 PAF Arrears Before Tax (PAF ARBTX). 

OSC will automatically convert all employees in the payroll system registered in Tiers 3, 5 and 6 of the NYS Police and Fireman Retirement System who currently have deduction code 617 PAF Retirement After Tax (PAF ATX) to code 616 PAF Retirement Before Tax (PAF BTX); and who currently have deduction code 619 PAF Arrears After Tax (PAF ARATX) to code 618 PAF Arrears Before Tax (PAF ARBTX).

The narrative description for the following Retirement Benefit Programs have been changed to reflect the before tax contribution as follows:


Retirement Benefit Plan

New Narrative Description

PAFAT3

PAFBT3 Before Tax Retirement

PAFAT5

PAFBT5 Before Tax Retirement

PAFAT6

PAFBT6 Before Tax Retirement


Agency Actions Notify affected employees.

Agencies must use the new before tax deduction codes for employees who are entered in PayServ in the NYS Police and Fireman Retirement System after October 4, 2013.  The agency will continue to select the Retirement Benefit Plan types PAFAT3, PAFAT5 or PAFAT6.

Questions

Questions regarding this bulletin may be directed to the Payroll Deduction mailbox.