As outlined above, PayServ now utilizes the Election Date field to ensure compliance with the overtime compensation limit for Tier 5 employees. As a result, it is critical that the employee’s correct Date of Membership be entered in the Election Date field on the Retirement Plans panel to ensure the employee does not exceed the overtime limit.
Agencies should ensure that appropriate staffs in payroll, personnel, and/or benefit service offices are prepared to assist Tier 5 employees with questions.
It is anticipated that most questions will relate to the payroll calculation process and how the total, pensionable earnings amounts reflected on Annual Member Statements from TRS was derived.
To answer questions relating to the payroll calculation process, agencies should review the employee’s Earnings Balances in PayServ to confirm that the employee’s retirement contribution has been reduced or eliminated as a result of reaching the overtime compensation limit for the calendar year.
As of the paycheck of 8/18/10, employee “X” earned total YTD overtime compensation (non-straight time) of $14,750.00 per a review of Earnings Balances in PayServ.
The employee’s paycheck of 9/1/10 includes regular earnings of $1,726.00 and overtime compensation (non-straight time) of $325.00.
Based on the overtime compensation limit of $15,000 for 2010, PayServ will include only $250.00 of the employee’s overtime compensation to be paid in the 9/1/10 paycheck ($15,000 - $14,750.00) when calculating the employee’s pensionable earnings ($1,726.00 + $250.00) and retirement contribution amounts for the 9/1/10 paycheck.
Any additional overtime compensation (non-straight time) earned by this employee will be excluded from the pensionable earnings and retirement contribution calculations for the remainder of 2010.
In order to answer questions relating to the pensionable earnings amounts reflected on Annual Retirement Member Statements, agencies should add the TRSBT5 Calculated Base total from the employee’s Paycheck Deductions tab in PayServ for each paycheck attributable to the applicable TRS school year reporting period.