To provide agencies with procedures to populate retirement records in PayServ for employees who enroll in PFRS
Employees who first join PFRS on or after January 9, 2010
January 9, 2010
On December 10, 2009, the Governor signed into law pension reform legislation (Assembly Bill No. A40026 and Senate Bill No. S66026) that creates a new Tier 5 that, in accordance with constitutional requirements, only applies to new members of PFRS who first join on or after January 9, 2010.
Some of the significant changes impacting Tier 5 members include, but are not limited to:
- Employee contributions of 3% of pay for all years of creditable service
- Ten year credited service vesting requirement
- While ALL overtime compensation should continue to be reported, overtime compensation will be limited for final average salary calculations to 15% of non-overtime annual wages by calendar year effective in 2010.
Overtime compensation as defined in the legislation is “compensation paid under any law or policy under which employees are paid at a rate greater than their standard rate for additional hours worked beyond those required.
OSC has revised the Retirement Plan Table in PayServ for Retirement Plan Type “7W” (PFRS).
Agencies now have the ability to select the Benefit Plan option of “PAFAT5” which must be used when setting up retirement records for tier 5 PFRS members.
This new Benefit Plan requires agencies to select a Contribution Status of “Contributing” and an Election Option Code of “SEO” (Standard Election Option), which will automatically default the required contribution rate of 3% in the Percentage field.
The 3% contribution is not covered under Section 414-h of the Internal Revenue Code and is subject to both Federal and State withholding taxes.
Agencies will be able to identify affected employees based on the information provided by PFRS upon the employee’s enrollment in the Retirement System.
Upon receipt of such information, agencies must populate the employee’s retirement record as follows:
- Open the Retirement Plans page. (Path: Home>Compensate Employees>Administer Base Benefits>Use>Retirement Plans)
- Enter employee's EmplID in search box.
- Click Search.
- Select the correct Empl Rcd# for the corresponding Job Record (if multiple records exist).
- Enter “7W” in the *Plan Type field.
- Enter the current payroll period begin date or Hire Date, whichever is later in the *Deduction Begin Date field.
- Enter the employee’s Date of Membership per the information provided by PFRS in the *Election Date field.
- Enter the Benefit Plan of “PAFAT5” in the *Benefit Plan field.
- Enter “5” in the strong>*Tier field.
- Enter the employee’s Retirement Registration Number* as provided in the Reg Nbr: field.
- Enter “Contributing” in the *Contribution Status: field.
- Enter “SEO” in the Option Code field under “Election Options.”
- Tab to the Percentage field which will automatically default to the required 3% contribution rate.
- Click Save.
* Members who join the NYSPFRS on or after January 9, 2010 will have registration numbers beginning with 0B5 for easy identification.
Although the registration number as assigned by PFRS will contain a hyphen, only the 8 digit alphanumeric values should be entered in the Reg Nbr* field in PayServ in order to prevent reporting discrepancies.
Questions regarding this bulletin may be directed to the Payroll Deduction mailbox.