STATE TEACHERS RETIREMENT SYSTEM OF OHIO How Calamity Days Affect Summer Retirements On-Demand Version

Transcription

1 Welcome to our webinar on. My name is Beth Hohenstein and I am a senior education coordinator at STRS Ohio. Living in Ohio, you know we can have unpredictable weather that may require your district to use calamity days. If your school year would have normally ended in May and your district is required or chooses to make up calamity days that extend teacher workdays into June, this may impact a member who had planned to retire effective June 1. 1

2 During today s webinar, I will: Explain how calamity days affect a member planning to retire June 1, Discuss options for the retiring member, Review the employer s responsibilities, Explain the process for purchasing calamity days, and Provide detail on how to complete retirement reports for retiring members choosing to purchase calamity days. 2

3 First, let s look at how extending the school year into June poses a problem for a member expecting to retire with an effective retirement date of June 1. Assume your district s last teacher workday was originally scheduled for May 31. However, during the school year your district incurred seven calamity days. The district decides to make up two calamity days by extending the school year by two days. This means the last teacher workday is now June 2. Why is this a problem for a member planning to retire effective June 1? 3

4 A member planning to retire June 1, cannot work after May 31 and still retire in June. If the member doesn t work the additional days, the contract for that school year will not be completed. While this may not sound like much of a problem, noncontract completion may impact the member s final average salary which is used to calculate the monthly retirement benefit. 4

5 The retiring member has three options when deciding the best course of action if the school year is extended into June due to calamity days. The first option is for the member to work the additional days in June and change his or her retirement effective date to July 1. The second option is for the member to choose not to work the additional days in June and still retire effective June 1. The member forfeits salary payments and related contributions for the days not worked. Sometimes this is referred to as shaving days off of the contract. 5

6 The third option is for the member to choose not to work in June, give up salary payments for the days not worked but complete contributions on the contract by purchasing calamity days. 6

7 Section of the Revised Code grants an educator the right to complete contributions for any payroll period during which the educator was prevented from making regular retirement contributions for certain reasons. Absences caused by school closings for weather or other emergency conditions that alter the regular school year qualify as one of those reasons. Administrative Code Rule 3307: states that members may purchase calamity days by remitting member contributions on the salary they would have earned had they worked the extra days. 7

8 If a member is trying to decide to continue with a June retirement, move to a July retirement or purchase calamity days, the most valuable advice you can give to the member is to contact an STRS Ohio benefits counselor. The member may do so by calling the Member Services Center toll-free at Noncontract completion may affect the member s final average salary, which is a component of calculating the monthly retirement benefit. The counselor will be able to provide benefit estimates for each option available to the member to help determine the possible financial impact. This will assist the member in determining whether or not to purchase the calamity days. 8

9 The process of purchasing calamity days is the same as purchasing a current absence or leave during the year in which it occurred. If a member chooses to purchase calamity days, STRS Ohio will instruct the member to contact his or her employer to determine the amount of contributions due. The employer will calculate the amount of member contributions owed for the calamity days by multiplying the member s daily rate of pay by the member contribution rate and the number of calamity days being purchased. The employer must then report the purchase to STRS Ohio. 9

10 There are two methods to report the purchase of calamity days to STRS Ohio. The first method is for the employer to include and remit the member contributions for the calamity days with a current fiscal year payroll report. This must be submitted before the member s effective retirement date. 10

11 The second method is for the member to write a check made payable to STRS Ohio for the member contributions due to purchase the calamity days. The employer then forwards the check along with a letter explaining the payment to STRS Ohio. The letter should include the member s name, last four digits of the member s Social Security number and explanation of the calculation of the member contributions. The check and letter should be mailed to the: STRS Ohio Accounting Department 275 East Broad Street Columbus, OH

12 It is important to note that the Revised Code requires the employer to pay the corresponding employer contributions of 14% when a member purchases calamity days. 12

13 The method used to pay the member contributions will determine how you complete the retirement report. If you reported and submitted the member contributions for the calamity days with a current fiscal year payroll report, you will list the member s full contract amount on Line 1 of the deposit and service report, even though the member didn t earn the full contract. Technically, the member has completed contributions on the full contract, so from a contribution perspective, the member has met the contract obligation by purchasing all calamity days. You will also indicate the number of days the member purchased through payroll in the comments section of the deposit and service report. Finally, these contributions should be included on your district s annual report. 13

14 If the member wrote a check payable to STRS Ohio for the member contributions for the calamity days, list the member s actual earnings for the fiscal year on Line 1 of the deposit and service report. This amount should be less than the member s contract amount since earnings were not paid for the additional calamity days and member contributions were sent in a personal check instead of through a payroll report. Please note in the comments section of the deposit and service report the number of calamity days being purchased and indicate the purchase was made directly to STRS Ohio by the member. Finally, since the member is purchasing these calamity days with a personal check instead of through payroll, do not include the contributions on your district s annual report. 14

15 Let s review some important points from the webinar: If inclement weather causes your school year to extend into June, encourage any member retiring June 1 to contact an STRS Ohio benefits counselor. The counselor will provide benefit estimates for each option available to the member to help determine the possible financial impact. If the member decides to purchase calamity days, calculate the amount of member contributions owed and remit through payroll or by sending the member s personal check with a letter. If contributions are remitted through payroll, remember to account for the purchase on your district s annual report. Finally, remember to include the appropriate details about the purchase of calamity days on the retiring member s deposit and service report. 15

16 If you have additional questions as the possibility of purchasing calamity days arise, please call STRS Ohio toll-free and ask to speak to an employer advisor or send an to 16

17 In addition, as part of this on-demand webinar, STRS Ohio has provided you with a list of frequently asked questions resulting from the live webinars held on this topic. A link to this document can be found on the webinar page. Thank you for watching! We hope you found this information helpful! 17