State Agencies Bulletin No. 1275

Subject
New Deduction Code 616 PAF Retirement Before Tax (PAF BTX) and new Deduction Code 618 PAF Arrears Before Tax (PAF ARBTX)
Date Issued
October 15, 2013

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.